In order to make full use of the controllable damping characteristics of magnetorheological (MR) dampers, feedback control of the damping forces for MR dampers is necessary, which needs extra dynamic response sensors and control systems as active control systems do. The extra dynamic response sensors for semi-active control of the MR dampers will increase the application cost of MR dampers, occupy the installation space, complicate the system, and decrease the reliability. In this paper, an integrated relative displacement sensor (IRDS) technology to make MR dampers self-sensing based on electromagnetic induction, and the principle of an integrated relative displacement self-sensing MR damper (IRDSMRD) based on the IRDS technology, are introduced. The IRDSMRD mainly comprises an exciting coil wound on the piston and an induction coil wound on the nonmagnetic cylinder. In the IRDSMRD, the coil wound on the piston simultaneously acts as the exciting coils of the MR fluid and the IRDS while the coil wound on the cylinder acts as the induction coil of the IRDS. The MR fluid in the annular fluid channel and the IRDS are simultaneously energized by the exciting coil through letting the carrier of the IRDS (AC) possess different frequency from the current for the MR fluid (DC), which realizes the frequency division multiplexing of the exciting coil. Based on the proposed principle for the IRDS and IRDSMRD, an IRDSMRD is designed and modeled and the damping and sensing performances of the designed and developed IRDSMRD are also modeled and analyzed using the finite element method (FEM) with the software package Maxwell 2D. The research results indicate that the function of the relative displacement sensing property can be integrated into MR dampers, and the designed IRDSMRD possesses large controllable damping ratio and good relative displacement sensing performance utilizing the IRDS technology proposed in this paper.