A system for monitoring and controlling the length of anchor rode comprises a winch, a sensor assembly associated with the winch and a control circuit connected to the sensor and the winch. The winch is mounted on a vessel and has a rotatable element about which a length of anchor rode is at least partially wrapped. The sensor assembly is mounted adjacent the rotatable element for generating signals representative of the amount and direction of rotation of the rotatable element. The winch is controllable to rotate the rotatable element in a first direction, either in a powered fashion or through free fall, for letting out the anchor rode from the vessel to lower the anchor. The winch is also controllable to rotate the rotatable element in a second direction for pulling the anchor rode into the vessel to raise the anchor. The control circuit is connected to the winch for causing the rotatable element to rotate in the first and second directions and is also connected to the sensor assembly for determining a length and direction of anchor rode deployed from the winch utilizing the signals from the sensor assembly .