Distributed Bragg reflector (DBR) fiber laser, consisting of an active fiber sandwiched between two highly reflective fiber Bragg gratings, has attracted much research attention due to their compactness, multiplexing capability, and high stability with single-longitudinal-mode operation for the potential applications of wavelength-division multiplexing communication, optical microwave signal generation, optical sensing, and etc. Numerous efforts have been made in the past to fabricate high-performance sensors utilizing DBR fiber laser for detection of transverse pressure, magnetic field, torsion, high-frequency ultrasound, and etc. In most situations, however, the laser modes are mainly confined in the fiber core and are insensitive to external refractive index change. In this work, we demonstrate a CO2-laser carved DBR fiber laser for the purpose of refractive index detection. A parabola-like opening is firstly formed inside the laser cavity so that the laser output becomes tunable by the refractive index inside the opening. The structural parameter influence, the lasing threshold condition, and the temperature coefficient are investigated. We subsequently broaden the width of the opening using the laser-beam scanning technique and show that the beat frequency can be modified with changing external refractive index. The developed devices have advantages of high sensitivity, stability, and low cost compared to most other fiber counterparts and thus can have potential applications in tunable optical lasing, optical sensing, and etc.