Abstract: In a magnetic compass compensation system suitable for use within a ferrous land vehicle, a secondary magnetic sensor senses, the total magnetic field as components along a three axis system drawn vertical, lateral and transverse to the ferrous vehicle. Compensation signals corresponding to the permanent and induced magnetic fields of the vehicle are isolated from the total magnetic field. The compensation signals are applied to compensation coils surrounding a primary magnetic sensor for providing an output equivalent to the horizontal components of the earth's undisturbed magnetic field.