The compensation of the diaphragm-based F-P fiber sensor due to the arc-end effect is discussed and simulated in this paper. The arc-end effect happens when the displacement of a diaphragm-based F-P fiber sensor is significant enough, making it impropriate to treat the diaphragm as a plane. Thus, the propagation pattern of the parallel plane cavity must be modified to conform to the actual law of the arc-end fiber sensor. The model of the arc-end cavity is calculated and simulated by using Kirhoff’s diffraction formalism and the arc-end scattering effect is determined. Also, the compensation method of the cavity length is presented based on a typical demodulation method.