Displacement sensors play an essential role in many applications. Based on an alternating current magnetic flux measurement, a novel displacement sensing method aimed at developing a practical displacement sensor for ferromagnetic materials is proposed. In this method, the displacement is measured by detecting the magnetic flux in a magnetic circuit, according to a linear relation between the magnetic flux and the reciprocal of displacement. An equivalent magnetic circuit and finite element method are used in analyzing a bridgestructured sensor designed in this paper. Both show that the output of the sensor is linear with the reciprocal of the displacement. A series of experiments have verified the feasibility of the proposed method. The measured results of our prototype sensor show a linear relation with the correlation coefficient R 2 over 0.995 in a measurement range larger than 3 mm. Furthermore, the results significantly indicate that the measured results are not influenced much by the change of ferromagnetic materials with the worstcase error less than 5%.