This letter demonstrates a novel prism-based optical-readout, which uses a single prism to detect the incoming TM polarized wave just below the critical angle. The method is used with a 35-µm-pixel pitch MEMS thermal sensor, whose inclination angle changes with the absorbed infrared (IR) radiation that results in an increase in the reflectivity at the prism’s glass–air interface. We compared this approach with the conventional knife-edge method. Noise equivalent temperature difference for a single sensor was measured as 200 mK for knife-edge method, and 154 mK for the proposed critical angle approach. Our approach shows a significant improvement for the sensitivity of the IR sensor. Both methods utilize an AC-coupled readout method for a single MEMS pixel using a photodetector, which responds only to changes in the scene. This method can be scaled to achieve smart pixel cameras for read sensor arrays with low-noise and high-dynamic range.