A key challenge hindering the mass adoption of Lithium-ion and other next-gen chemistries in advanced battery applications such as hybrid/electric vehicles (xEVs) has been management of their functional performance for more effective battery utilization and control over their life. Contemporary battery management systems (BMS) reliant on monitoring external parameters such as voltage and current to ensure safe battery operation with the required performance usually result in overdesign and inefficient use of capacity. More informative embedded sensors are desirable for internal cell state monitoring, which could provide accurate state-of-charge (SOC) and state-of-health (SOH) estimates and early failure indicators. Here we present a promising new embedded sensing option developed by our team for cell monitoring, fiber-optic sensors. High-performance large-format pouch cells with embedded fiber-optic sensors were fabricated. The first of this two-part paper focuses on the embedding method details and performance of these cells. The seal integrity, capacity retention, cycle life, compatibility with existing module designs, and mass-volume cost estimates indicate their suitability for xEV and other advanced battery applications. The second part of the paper focuses on the internal strain and temperature signals obtained from these sensors under various conditions and their utility for high-accuracy cell state estimation algorithms.