The LVDT is an electromechanical device that produces an electrical output proportional to the displacement of a separate movable core. It consists of a primary coil and two secondary coils symmetrically spaced on a cylindrical form. A free-moving, rod-shaped magnetic core inside the coil assembly provides a path for the magnetic flux linking the coils.

When primary coil is energized by an external AC source, voltages are induced in the two secondary coils. These are connected series opposing so the two voltages are of opposite polarity. Therefore, the net output of the transducer is the difference between these voltages, which is zero when the core is at the center or null position. When the core is moved from the null position, the induced voltage in the coil toward which the core is moved increases, while the induced voltage in the opposite coil decreases. This action produces a differential voltage output that varies linearly with changes in the core position. The phase of this output voltage changes abruptly by 180° as the core is moved from one side of null to the other. (The core must always be fully within the coil assembly during operation of the LVDT, otherwise gross non-linearity will occur.)