A differential magnetic wheel detector is disclosed which identifies the presence and direction of a railway vehicle. The wheel detector includes a primary winding, a secondary winding and signal processing circuitry. The primary winding is excited by a source of AC energy to produce a magnetic flux in the wheel of the railway vehicle. The secondary winding senses a change in voltage induced by the magnetic flux in the railway wheel. The secondary winding includes two coils in a differential bridge which prevents external factors from interfering with the sensing of the wheel. The signal processing device transforms the voltage change into a signal identifying the presence and direction of the railway vehicle.