Abstract: Apparatus for detecting the displacement of a member having a magnetic scale on which are provided calibrating signals of a predetermined wavelength. First and second magnetic heads are disposed to reproduce the calibrating signals from the magnetic scale; and these heads also are energized with pulse signals, whereby each of the magnetic heads produces a balanced modulated pulse signal derived from the reproduced calibrating signal and the energizing pulse signal supplied thereto. The balanced modulated pulse signals from the two heads are added to obtain a phase modulated pulse signal. A predetermined higher harmonic of the phase modulated pulse signal is selected; and predetermined increments of phase shift in the selected higher harmonic of the phase modulated pulse signal are detected so as to produce output pulse signals representing corresponding increments of displacement.