Stellar spectra have been obtained using a multichannel Fourier Transform Spectrometer (FTS) which incorporates components of the Navy Prototype Optical Interferometer. It is well known that a FTS can provide superior wavelength stability as compared to traditional spectrometers. Unfortunately the FTS traditionally suffers from exceptionally poor sensitivity, which until now has limited its uses to sources with high fluxes and/or those with narrow band emission (e.g. the Sun, nebulae, and laboratory samples). We present stellar observations using a new FTS design which overcomes this sensitivity limitation by using a conventional multichannel spectrometer in conjunction with the FTS system. The signal-to-noise ratio of spectra from our test-bed observations are consistent with the theoretical prediction and show that for N channels the sensitivity scales like N, while the signal-to-noise ratio scales like . With this type of an instrument on a 3-m telescope and 9 000 channels we expect to be able to detect and measure such exciting astrophysical phenomenon as gravitational redshifts from single, main sequence stars and extrasolar planets of terrestrial mass.