Optical fiber sensor with small size, light weight and immunity to electromagnetic interference can be embedded and integrated into the host material to form an ideally smart structure system. One must recognize that optical fibers are foreign entities to the host structure, therefore will induce high stress state in the vicinity of the embedded sensor irrespective of the small size of the fiber. To address this concern, present paper focuses the attention on constituent interaction between the optical fiber, coating, matrix and host material. An analytical model to predict the stress fields in the vicinity of the embedded optical fiber is presented. The theoretical development is based on the four concentric cylinders model which represents the optical fiber, protective coating, matrix and host material, respectively. The host material is considered to be a composite with reinforced fiber parallel to the optical fiber. In this investigation, the host structure is subjected to in-plane shear loading. The effects of the coating and host material on the stress distribution in the vicinity of the embedded optical fiber are presented through a parametric study.