An inductive-type rotary encoder includes a stator having at least one conductive pattern on one side thereof, and a rotor having another conductive pattern on one side thereof which faces the at least one conductive pattern of the stator. The conductive patterns are inductively coupled to one another so as to generate an output signal indicative of the angular position of the rotor relative to the stator. In order to reduce the overall size and number of parts required, the circuitry for energizing the stator conductive pattern(s) and for generating the output signal can be provided on a printed circuit board, the opposite side of which contains the at least one stator conductive pattern. In order to reduce noise as well as to reduce the first harmonic error, lead lines for attaching the stator and rotor conductive patterns to the controlling circuitry and a return line which extends along substantially the entire length of the rotor or stator conductive patterns and attaches to one of the lead lines are provided and specially located relative to undulations of the conductive patterns. Additionally, the length of spokes which define undulations of the respective rotor and stator conductive patterns can be controlled to improve the performance of the rotary encoder. A rotary encoder including inductively coupled rotor and stator conductive patterns for generating a relative angular position (or rotary speed) of the rotor relative to the staator, as well as stator and rotor index pulse patterns inductively coupled for generating an index pulse once per revolution of the rotor relative to the stator is also provided.