Tm3+-doped zirconium fluoride fibre pumped with a low-cost diode laser at 785nm is shown to function as a useful source for water or humidity sensing. The near-IR fluorescent emission band centred at 1.47 mu m exhibits considerable overlap with an absorption band of H2O. Using a variable path-length cell and the residual pump signal as a reference, the fluorescent fibre source is shown to enable measurement of path lengths as low as 1 mu m in liquid water. In addition, using a declad fibre as an evanescent-wave absorption probe, the feasibility of measuring water concentrations in other liquids is demonstrated.