A double-coil inductive displacement transducer is a non-contact element for measuring displacement and is widely used in large power equipment systems such as construction machinery and agricultural machinery equipment. The type of coil excitation signal has an impact on the performance of the transducer, but there is little research on this. Therefore, the influence of the coil excitation signal on transducer performance is investigated. The working principle and characteristics of the double-coil inductive displacement transducer are analyzed, and the circuit simulation model of the transducer is established. From the aspects of phase shift, linearity, and sensitivity, the effects of a sine signal, a triangle signal, and a pulse signal on the transducer are compared and analyzed. The results show that the average phase shift, linearity, and sensitivity of the sine signal were 11.53°, 1.61%, and 0.372 V/mm, respectively; the average phase shift, linearity and sensitivity of the triangular signal were 1.38°, 1.56%, and 0.300 V/mm, respectively; and the average phase shift, linearity, and sensitivity of the pulse signal were 0.73°, 1.95%, and 0.621 V/mm, respectively. It can be seen that the phase shift of a triangle signal and a pulse signal is smaller than that of a sine signal, which can result in better signal phase-locked processing. The linearity of the triangle signal is better than the sine signal, and the sensitivity of the pulse signal is better than that of the sine signal.