This study investigated the reflected spectral deformation mechanism of fiber Bragg grating (FBG) sensors with crack propagation. This analysis was performed based on the simulated FBG response by applying modified-transfer matrix modeling (TMM) with the strain states, which were extracted by the finite element method (FEM) analysis. Experimental data were obtained from FBG sensors bonded in an aluminum alloy structure and subjected to multiple crack lengths, and the strain values were obtained by digital image correlation (DIC) technology. Based on the simulations and the experimental full spectral response, we compared the performance of two damage features: The full width at half maximum (FWHM) and the spectral difference. In addition, results showed that the two features were insensitive to experimental noise and were highly sensitive to the complex strain field caused by crack propagation. Moreover, the damage features changes in the crack propagation process also provided a way for crack position measurement. Ultimately, the 10 mm grating lengths sensors showed better performance to the crack detection with longer sensitivity distance. According to the research in this paper, the crack position was quantitatively determined by evaluating different damage features of the reflected spectrum.