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Capacitive fringing field sensors have been used in some non‐contact detections. A lateral displacement measurement method based on fringing field capacitors is investigated by simulations and experiments in this study. For the conventional interdigitated structure, the periodic electric field distribution is obtained because of those alternate electrodes, which produces periodic capacitances along with the target displacement. However, it is inconvenient to construct measurement systems due to the non‐linear capacitance output. A dentate structure is proposed to improve the output characteristics of displacement measurement. The periodic uniform electric field is achieved by the dentate electrodes, which brings the linear capacitance variation in every period. Indium–tin oxide film was employed to fabricate a prototype, and the experiment results indicate that the dentate structure can be used in the lateral displacement measurement for its linear output characteristics. [ABSTRACT FROM AUTHOR]