Inductive transducers for measuring displacement are divided into two groups according to their measurement range. A variable air-gap type transducer is widely used for a measurement small range. A conventional variable air-gap type transducer has high sensitivity but lacks a linear measurement range. The air gap is also increased to maintain linearity as the measurement range increases, which induces a loss of sensitivity. The proposed variable overlap-area type transducer retains the original sensitivity and its linearity does not deteriorate in spite of variations of the measurement range. The proposed transducer is a flexible system that can increase its measurement range as well as maintain high sensitivity and linearity. The experimental results obtained using the prototype indicate that the sensitivity is higher than 2200 mV(.)V(-1) mm(-1) and the linearity error is below +/-0.075% in the range of +/- 200 mum.