An interferometrically readable optical encoder for sensing linear position includes an optical medium movable in a linear direction and having a data storage layer, a plurality of uniformly sized sectors being defined in the layer. A linear absolute track is defined in the layer parallel to the linear direction and a plurality of absolute marks is formed in the layer in sequence along the absolute track within each sector, each such absolute mark being detectable by interferometric reflection of coherent light as representative of a binary 1 or a binary 0 and each such plurality of absolute marks defining a binary word. A linear incremental track is defined in the layer parallel to the linear direction with a series of incremental marks formed in the layer and evenly spaced along the first incremental track, each such incremental mark being detectable by interferometric reflection of coherent light. The binary word in a sector is read to identify the position of that sector in the linear direction and indicate the approximate position of the medium. The incremental marks refine the approximate position indication to provide a more precise position of the medium.