A novel MEMS variable optical attenuator (VOA), which has completely different attenuation mechanism from those in literatures, is proposed and demonstrated in this paper. The basic operation principle is that the optical power coupled between two initially aligned single-mode fibers will be continuously attenuated while the end of one of the fibers is deflected from the initial position. A micromachined solenoid type inductor with a U-shaped permalloy magnetic core is used to attract the deflectable fiber that has a permalloy coat on its end. To fabricate the multi-layer three-dimensional inductive component, a new UV-LIGA process for thick photoresists is developed, combining advantages of both SU-8 and AZ-4000series photoresists. The inductive component is approximately 1.7 mm×1.3 mm×50 μm in size and has a low resistance value (~2.1 Ω). The whole size of the VOA before packaging is 30 mm×2 mm×0.6 mm. The first prototype shows less then 3-dB insertion loss at 0-dB attenuation and nearly 40-dB attenuation range with less than 20 mW electrical input power at wavelength 1550 nm.