We present the realization of a combined trapped-ion and optical cavity system, in which a single Yb^+ ion is confined by a micron-scale ion trap inside a 230 mum-long optical fiber cavity. We characterize the spatial ion-cavity coupling and measure the ion-cavity coupling strength using a cavity-stimulated Lambda-transition. Owing to the small mode volume of the fiber resonator, the coherent coupling strength between the ion and a single photon exceeds the natural decay rate of the dipole moment. This system can be integrated into ion-photon quantum networks and is a step towards cavity quantum-electrodynamics (cavity-QED) based quantum information processing with trapped ions.