As one of the most widely used light sources today, semiconductor lasers (SLs) are an important part of many optical systems, especially for sensing, communications, metrology, and storage applications. SLs have the advantages of small size, easy integration, and miniaturization. The massification of electronic devices has furthered this agenda, allowing the creation of portable systems capable of supporting optical sensing systems. Essentially, SLs are inherently nonlinear devices, in nonlinear systems, the folding and stretching behaviors of variables result in di↵erent dynamical routes. It is worth noting that under the conditions of a stable operation, an SL biased by constant current usually emits laser light with a constant intensity. However, with the introduction of external optical feedback (OF), the laser light can become unstable. SL will undergo from steady state, switching status, to period-one (P1) oscillation by crossing Hopf-bifurcation. In the P1 state, the system produces a modulation of the laser optical output power for the generation of microwave photonics (MWP) signals. In this thesis, we operate SL with OF scheme in P1 dynamics, and found that the proposed system has the great capability to achieve both displacement and absolute distance sensing applications with high resolution and wide measurement range, by using time-frequency information, relaxation oscillation information, and nonlinear dynamic characteristics carried in that SLs emit signals. The contributions of each chapter in this thesis are described in the following: In Chapter 3, we propose an SL with OF set at the P1 dynamics to generate the MWP signal for displacement sensing. Di↵erent from the traditional MWP generation method, the designed laser nonlinear dynamics are used by slightly perturbing the SL source with the help of external feedback light to make the system work in the P1 dynamic state, thereby generating regular microwave oscillation. By using the fourth-order Runge-Kutta method to numerically solve the famous Lang-Kobayashi differential equation, the boundary of di↵erent laser dynamic states is delimited, so that the system can generate stable and sustainable MWP signals in P1 dynamics. A set of parameter selection rules for designing an SL based MWP displacement sensing system is obtained. In addition, a measurement algorithm for recovering the displacement from an MWP sensing signal is developed. By making full use of the sensing information carried in both amplitude and frequency of the MWP signal, displacement sensing with high resolution and high sensitivity can be achieved. Both simulations and experiments are conducted to verify