A noncontacting automotive steering angle sensor involving the application of a two element magnetoresistive sensor to an otherwise conventional rack and pinion steering system. The rack is directly coupled to the steerable wheels, and the sensor is integrally mounted in a spring-loaded rack contacting mechanism (contact shoe) used to maintain a meshing engagement between the pinion and the rack. A variable permeability surface is formed on the surface of the rack along the travel path of the sensor such that axial movement of the rack differentially varies the magnetic flux density detected by each element of the sensor. A detector circuit comprising a bridge or simple voltage divider responsive to the differential resistances of the sensor elements develops an electrical signal indicative of the rack position.