An all-optical high sensitivity atomic magnetometer is investigated and demonstrated experimentally, of which the principle is based on the interaction between laser beam and rubidium atoms in magnetic field. This interaction is dependent on the magnetic field surrounding the Rb atom cell, therefore the magnetic field information can be obtained simply by measuring the changes of the laser power transmitted through the Rb atom cell. The principle of the atomic magnetometer is analyzed and the performance of the experimental setup is investigated. The experimental result agrees well with the theoretical predictions. Furthermore, some important factors that may affect the performance of the magnetometer are discussed, and the ways to improve the sensitivity of the atomic magnetometer are also put forward.