This paper presents a feasibility study of the application of giant magneto resistive (GMR) sensors in detecting motion of slow moving fluids. A motivating application for the proposed effort is the development of a smart catheter capable of monitoring the amount of body fluid drained from the ventricles of the brain. Microfabricated ferromagnetic flaps are used to detect motion of the surrounding fluid. The deflection of the flaps is detected by an ultrasensitive GMR sensor placed outside of the lumen of the catheter. Numerical and experimental results are provided demonstrating a resolution of 1.4 mL/h. Numerical analysis of the fluid past the sensing element show an optimal hinge length of the flexible flaps, as well as a significant increase in sensitivity with reduction of the by-pass gap to ∼50 µm. The effect of electro-magnetic interference and other sources of low-frequency noise (drift) has also been investigated. The results from the study are used to derive a set of design rules that may lead to the successful development of a smart catheter. [2014-0148] Index Terms-Liquid flow sensor, GMR sensor, smart catheter, ventriculoperitoneal (VP) shunt.