The encoder functioning as a feedback device is one of the basic components of motion control systems. There are four different sensor technologies used in linear servo applications, i.e., resistive, inductive, magnetic, and optical. The least complicated structure has a linear position transducer. Its principles of operation are based on the conversion of linear motion into rotation that is measured with the use of a precision potentiometer, tachometer, or digital encoder. However, the earliest linear encoders utilized in high-precision machines, e.g., in metal-cutting industry, were optical. Although other techniques are also now available, optical encoders are still predominant in industrial applications. In linear motor drives, where precision actuation and measurement are involved, most designers employ an incremental optical encoder as a well-accepted part of the electromechanical drive system. The typical optical encoder makes use of a graduated scale that is scanned by a movable optical readhead . The most important advantage of optical encoders is their easily achievable noncontact operation that eliminates friction and wear and permits reliable high-speed performance in workshop environments. Linear optical encoders are capable of achieving very high resolution, in some cases comparable to the laser interferometry technology. Their accuracy is a few orders of magnitude higher than that of similar resistive, magnetic, or inductive linear encoders. This is possible due to the superior precision of interpolation performed on much smaller-scale grating periods. The interpolation is a self-subdivision process of the signal representing the scale period.