A magnetic rotary encoder system includes a magnetoresistive sensor having a magnetoresistive element array which is selectively connected to accommodate a number of different diameter encoder wheels each wheel of which contains a different number of pieces of magnetic information recorded at corresponding different wavelengths. A sensing and conditioning circuit is coupled to the magnetoresistive sensor and detects changes in resistance of the magnetoresistive elements when a magnetic field produced by a magnetic pole causes the magnetoresistive resistance to drop. Output signals are provided in quadrature to increase the resolution of the system.