Utilizing suspended gate field-effect transistors (SGFETs), a displacement sensing mechanism is proposed in this paper. The design, numerical simulations, and fabrication process of the SGFET are presented. The SGFET arrays and the comb-drive actuator are integrated to form a MEMS position encoder. The resolution of the proposed MEMS position encoder is 6 μm over a 54 μm travel range. By arranging the SGFETs into arrays, position feedback over a large travel range is achieved for a comb-drive actuator.