In this letter, a torsion sensing arrangement based on a three beam path Mach–Zehnder interferometer (MZI) is presented. The MZI with three beam paths was fabricated by fusion splicing a piece of double ytterbium‐doped double‐cladding photonic crystal fiber (Yb‐d‐DPCF) between two segments of single mode fiber (SMF). Moreover, in our sensing arrangement the Yb‐d‐DPCF segment is acting both as the MZI as the gain medium. Here, a spectral MZI fringe shifting is induced by applying torsion over the Yb‐d‐DPCF. By this setup, a torsion sensitivity of 0.001 nm/° was achieved. Finally, it is shown that the sensing arrangement is compact and robust. © 2015 Wiley Periodicals, Inc. Microwave Opt Technol Lett 57:1857–1860, 2015