A lab-in-fiber platform, comprising a photonic crystal fiber component for light-sample interaction, was experimentally demonstrated to be effective as a sensor and micro-reactor. Specifically, it enabled the discrimination between free and liposome-encapsulated fluorophores as well as allowed for the excitation of in-fiber plasmonic photothermal effects, by alternating between different fiber-coupled inputs. The significant increase in fluorescence emissions upon release of fluorophores, encapsulated within liposomes at self-quenching concentrations, was perceived as a shoulder in the device’s spectral output that otherwise only comprises the input excitation. Markedly, the observed shoulder was only discernible when the photonic crystal fiber was placed in a bent orientation. This was explained to be associated with the bending-induced refractive index profile changes in the fiber cross section that led to increased amounts of evanescent fields for light-sample interactions. Results highlighted the viability of the lab-in-fiber platform as an alternative to current lab-on-a-chip devices.