LED emission spectra vary significantly with the operating temperature of the device and therefore most intensity-modulated optical fibre sensors employing LEDs as the optical signal source suffer from the associated measurement errors. Although, the advanced types of intensity-modulated sensors will often incorporate thermal stabilisation or a mechanism for reducing these errors, such implementations often involve considerable amount of increased system complexity. An alternative strategy called wavelength thermal matching (WTM) is described which depends on a careful selection of the signal channel centre-wavelengths to provide freedom from the errors caused by the LED thermal instability. Two distinct methods of minimising the effect of LED thermal instability are identified to achieve either thermally stabilised signals or thermally compensated signals. Thermally stabilised optical signals can be used to improve the performance of many single channel sensor systems as well as to simplify the design of stable LED signal sources employed for test and measurement applications. The strategy of providing thermally compensated signals has immediate implications for the dual wavelength referencing schemes used in intensity-modulated optical fibre sensors which can be enhanced in their effectiveness by selecting the signal wavelength bands so that differential variations between the signals due to the LED thermal effects are minimised.