A cylinder position sensing system includes a cylinder housing which slidably receives a rod or shaft element. The cylinder housing has an end piece which slidably receives the shaft element. A first axial groove is formed in the shaft element, and a first magnet member is mounted in the first groove. A second helical groove is formed in the shaft element and is spaced apart from the first groove. A second magnet member is mounted in the second groove. A magnetic field sensor is mounted in the cylinder housing so that the sensor generates an output signal as a function of a relative distance between the first and second magnet members as the second element moves with respect to the first element. Preferably, the shaft element includes a central cylindrical shaft and a hollow cylindrical sleeve mounted over and receiving the shaft. Preferably, the first and second grooves are formed in an inner surface of the sleeve, and the sleeve and the end piece are formed of nonferrous material.