This paper begins with a review of the current problems associated with the application of conventional magnetic-head-type shaft torque sensors. These sensors were first proposedin 1954. Newly developed low-profile magnetic heads for torque sensors which address the problems of the older type of sensors are then presented. The torque sensor which uses the lowprofile pick-up heads is described in detail. Experimental results showing the basicperformance of the torque sensor with carburized nickel chromium molybdenum steel shafts (SNCM 420 in JIS) are then described. In this combination of the heads and the shaft, thehysteresis of the inputoutput relationship is generally small and shows that the direction of traversal around the hysteresis loop changes as the amplitude of the excitation current changes. It is shown that an optimum operating condition exists for the torque sensorin which the hysteresis achieves a minimum value yet the sensitivity remains high. In a particular combination studied in this paper, the optimum excitation current was 0.3 A at the excitation frequency 60 kHz, where the total power loss at the pick-up heads was 0.37W. Under this operating condition, the hysteresis was extremely small, and the linearity was better than 0.6%.