Abstract: A non-contacting, inductively coupled leakage flux torque sensor and method of measuring torque by determining the change in leakage flux at a surface discontinuity as a result of a torsion stress. Two identical, mirror image discontinuities are formed in a ferromagnetic member. The discontinuities may comprise sets of slots or ferromagnetic projections on facing end surfaces of the ferromagnetic member. As a result of torsional stress on the member, the discontinuities change shape and dimension or are displaced, resulting in a change in leakage flux. The change in leakage flux is detected by two differentially connected coils. A modulator-demodulator circuit provides a determination of torque as a function of the changed flux.