A novel distributed optical fiber vibration sensing system is proposed and demonstrated, using a ring structure-based Mach-Zehnder interferometer (MZI). The direct current light-based real-time and dynamic locating technique is exploited. By introducing the ring structure into the interferometer, the linear interferometer is changed into ring type, resulting in two counter-propagating light waves, thus one MZI equally operates as two. When a vibration acts on the sensing fiber, the counter-propagating signals produce identical phase-changes simultaneously, which propagate along different paths to optical receivers. With the help of digital processing technologies to analyze the received signals, the characteristic parameters of vibration, including the spatial position, frequency and amplitude can be achieved in real time. A spatial resolution better than 40m is successfully verified in a 1.01 km prototype system of single vibration. Furthermore, the feasibility of detecting and locating multiple vibrations is theoretically analyzed and simulated.