Interferometer Fiber Optic Gyroscope (IFOG) has established as critical sensor for advance navigation systems. Sensor coil is known to be heart of IFOG. The bias drift and scale factor performance of IFOG depend on the sensor coil. The environmental perturbations like vibration, shock, temperature and magnetic field can affect the measured phase difference between the counter propagating beams, thereby introducing a bias error resulting in degradation of IFOG performance. In general these factors are both time varying and unevenly distributed throughout the coil producing a net undesirable phase shift due to variations in the optical light path, which is undistinguishable from the rotation induced signal. The development of sensor coil for high performance includes selection of optical fiber, spool material, coil winding technique and potting adhesive. In the thesis, the effects of various perturbations like temperature, vibration and magnetic field on the sensor coil are analysed, which degrades the gyro performance. The effect of temperature and vibration can be reduced by proper selection of spool material, winding method and by applying adhesive during the winding of sensor coil. The effect of magnetic field can be reduced by using the high birefringence polarization maintaining fiber with shorter beat length, shielding the sensor coil and reducing the number of twist during the winding. Design and fabrication of the sensor coil is done for control grade & navigation grade FOG with fiber length of 100 m and 1000 m respectively with the polarization maintaining fiber of two different manufacturer Fiber Core, UK and Nufern, USA selected based upon the beat length and Numerical Aperture so that sensor coil has minimum effect of magnetic field and the bending of fiber. Presently the spool material used is Aluminium alloy (HE15) for the ease of fabrication and easily availability of material. The Quadrupolar winding is done to reduce the thermal gradient effects. The indigenously developed special adhesive is applied layer by layer to reduce the environmental effects. In order to study the lifetime of sensor coil accelerated aging test (85°C, RH 85 %) for 30 days is also carried out.