New type of optically controllable variable fiber optical attenuator based on thermo-optical effect in liquid cladding of optical fiber is described. The thermo-optical effect in liquid cladding optical fiber causes refractive index contrast changes in core–cladding interface, what enables to change the propagating optical signal power with temperature. The temperature change is achieved by fiber based heating element using laser radiation. Attenuation up to −12dB was achieved in static dependence and dynamic response confirmed rise time up to 24ms.