Abstract: An improved proximity sensing circuit and method is provided. In particular, the proximity sensing system includes an improved controller comprising a programmable logic device (“PLD”). In one particular aspect of the invention, the controller includes a field programmable gate array (“FPGA”) controller. In general, the proximity sensing system measures the AC and DC resistances of a proximity sensor and a precision resistor and, from these measured values, calculates a compensated resistance. The compensated resistance may be used to determine the gap. The measured AC and DC resistances of the proximity sensor may be used to perform a self diagnostic on the sensing system and aid in determining a system fault.