The main objective of this research is on the design of a position sensing system for magnetic levitated rotors. Linear hall-effect sensor is selected for the sensing system due to its low-cost and miniature size. The sensor system developed includes several hall-effect sensor modules and a ring permanent magnet. The sensor module and the dimension of the permanent magnet are designed via a finite-element analysis software. The circuits to process the output signal of hall-effect sensors are also designed. An experimental system to simulate the operation of magnetic bearing is built for experimental verifications. The test results are provided in the thesis to validate the performance of the sensor system.