A hybrid sensing configuration combining fiber Bragg grating (FBG) with a Fabry-Perot interferometer is proposed for highly sensitive detection of pressure and temperature inside a commercial lithium-ion battery (LiB). The battery is also instrumented externally with FBGs to monitor its surface temperature variations. The LiB is operated under several cycling tests at different C-rates and environmental temperatures. High pressure and temperature resolutions of ±0.4 mbar and ±0.5 °C, respectively, are attained for the developed hybrid sensor, along with a minimum response time of 1.7 s. When the LiB is subjected to higher environmental temperatures, reduced thermal variations and higher pressure variations are registered by the optical sensor. Overall, during the cycling tests, the external temperature sensors closely follows the internal sensors behavior. Incremental capacity analysis derivative curves were systematically applied throughout the battery cycling experiments to unveil relevant insights into the interplay between pressure and temperature variations and the LiB electrochemical behavior. It was found that the pressure fluctuations present a “breathing profile” directly linked with the volume electrode lithiation and delithiation processes.