Precision measurement of two-dimensional displacements is needed in many domains, such as precision fabrication and detection. This paper presents a novel inductive position sensor with the capability of measuring displacements in x- and y-directions simultaneously. The sensor consists of two parts: a ferromagnetic plate with primary windings that are composed of four layers of spiral coils and a ferromagnetic plate with secondary windings that are composed of four layers of spiral coils. Primary windings are supplied with two quadrature 20-kHz alternating current to generate traveling wave magnetic field along x- and y-directions separately. Secondary windings output two signals whose phases are proportional to the linear displacements in x- and y-directions, respectively. The structure and working principles of the sensor are proposed. Meanwhile, a sensor model is simulated to verify the feasibility of the sensor, and a sensor prototype is fabricated for physical experiment. According to the analysis of the experimental results, the measurement range is up to 140 mm × 140 mm, and the maximum linearity in one pitch is 1%. In addition, measurement errors show that the performance of sensor may be improved by optimizing the layout of primary and secondary windings and signal processing circuit.