A method of installing a piston position sensor proximate to a closed end of a hydraulic cylinder is provided. The sensor is attached to the face of a piston and that piston/sensor combination is inserted into the cylinder tube to position the sensor in the desired location. When properly located within the cylinder tube, the sensor is affixed to the cylinder tube by means of beveled holes in the sensor that receive bolts threadedly inserted through the cylinder tube to further properly align the sensor within the cylinder tube. When so affixed, the sensor is then detached from the piston so that the piston can thereafter move independently of the sensor. A fixture is also used that allows the assembler to accurately align the angular orientation of the sensor prior to being inserted into the cylinder tube.