New signal processing method for Electromagnetic Inspection using multidirectional magnetizing type sensor has been developed to detect linear-shaped defects such as cracks in every direction in test objects. In this method, the Amplitude-Modulated alternating currents, whose waveforms are the product of two sinusoidal waves of different frequencies, are used to produce a rotating magnetic field in test objects. The signal caused by a lift off variation of the sensor, which is not avoidable by conventional multidirectional magnetizing method, is reduced by this method. The effect is investigated by a test using 0.25% carbon steel sheet. It is also investigated that the inclined angles of defects are obtained by the phase information of the signal in a phasor diagram.