A noncontact inductive type displacement sensor is presented here. The sensor is realized with an inductive voltage divider possessing a floating wiper operated by a self-balancing feedback type signal conditioning circuit. The output of the self-balancing signal conditioning circuit is: 1) linear to the displacement of the floating wiper and 2) independent of the coupling capacitance that arises due to the air gap between the inductive element and the floating wiper. Error analysis and simulation studies presented here bring out the pitfalls that have to be avoided to obtain an optimal design for linear or angular displacement sensing. Experimentation on an emulated sensor and results obtained from a prototype angle sensor built and tested establish the efficacy of the proffered technique. © 1963-2012 IEEE.