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The performance of an oscillator-based read-out circuit for the linear variable differential transformer used as a displacement sensor is studied and various aspects of improving it are presented in this paper. The proposed read-out electronics treats the sensor’s secondary inductance as an unknown reactance, thereby incorporating an active oscillator circuit as a resonator to derive the position information. This method avoids the excitation of the primary coil using low-distortion sine-wave oscillators and the associated phase compensation circuitry as used in traditional signal conditioning circuits. The tradeoffs involved in choosing the frequency counter master clock frequency, the measurement update rate, and the achievable resolution are presented. Various factors that contribute to the nonlinearity have been studied from the standpoint of direct difference versus ratiometric formulas for deriving position information. It is shown that for the oscillator-based read-out procedure, resolutions in the range of 8–16 bits with update rates per channel ranging from 10 Hz to 7.86 kHz, and depending on the procedure used, a worst case full-scale nonlinearity error of ±0.14% are feasible. [ABSTRACT FROM AUTHOR]