The physical construction of a typical LVDT consists of a movable core of magnetic material and three coils comprising the static transformer. One of the three coils is the primary coil and the other two are secondary coils.

The basic transformer formula, which states that the voltage is proportional to the number of coil windings, is the backbone of the LVDT. The formula is,

where N is the number of coil windings and V is the voltage read out.

When the iron core slides through the transformer, a certain number of coil windings are affected by the proximity of the sliding core and thus generate a unique voltage output.

Most LVDT's are wired as shown in the schematic above. This wiring arrangement is known as open wiring. Since the number of coil windings is uniformly distributed along the transformer, the voltage output is proportional to the iron core displacement when the core slides through the transformer. This equation is,

where D is displacement of the iron core with respect to the transformer, and M is the sensitivity of the transformer (slope of the displacement-voltage curve).

Another commonly used LVDT wiring is known as ratiometric wiring, as shown schematically below.

The displacement for ratiometric LVDT's is given by the relation,