A sensor has been developed which allows the direct measurement of armature velocity. This offers the possibility of improving the dynamic performance of valve actuation system compared to existing sensors, which measure displacement. This sensor is based on a novel structure in which the armature stem includes a thin walled steel sleeve and the stationary element consists of two axially magnetised ring magnets, a pair of coils wound in series opposition and a simple magnetic circuit manufactured from 3 solid steel parts. This sensor is capable of directly providing an output voltage, which is proportional to velocity and requires neither amplification nor signal processing prior to A/D conversion. Considerable optimisation of this device has been performed during this project to obtain sensor designs, which combine high sensitivity and linearity. A fundamental understanding of the design issues in this type of sensor has been established by means of detailed modelling and experimental investigations. These studies have encompassed the influence of eddy currents, harmonic distortion caused by non- linearities and the various trade-offs between sensor compactness and performance. Two sensors design, which are very similar but with slightly different dimensions have been manufactured. One has undergone extensive bench testing in a dedicated experimental rig to fully validate its performance and the design methodology, while the other has been fully integrated into the bore of the spring in a demonstrator actuator unit for unit level testing. This sensor design has demonstrated considerable promise in terms of its applicability to high performance valve actuation systems, and its relatively simple structure amenable to volume manufacture. A patent has been granted on this technology, and its commercial potential is being benchmarked against competing technologies such as variable reluctance transformers / inductors and Hall effect / permanent magnet based sensors. It is worth noting that although this sensor has been developed within the specific context of valve actuation, it potentially has wider application in systems which require direct and low-cost measurements of velocity in the range 1-10 m. /s and stokes up to a few tens of millimetres.