In this study, a method for the modeling of ferromagnetic component of an ultra-miniature giant magneto resistance (GMR) sensor system is presented. The goal of the modeling is to design appropriate angular sensor system for the highly integrated DLR/HIT II 5-finger dexterous robot hand. A 3D static magnetic analysis modeling is used to avoid sensor damage by the excessive magnetic intensity and disorientation when other magnetic fields disturb the primary field. Using the finite element results, appropriate shape and size of ferromagnetic component is compared and optimized. A simplified signal processing circuit is also given for the ultra-miniature GMR sensor system. Finally experimental results show an angular accuracy of less than ± 1 ° with only the residual offset compensation of ultra-miniature GMR sensor system is obtained. Integration experiences reveal the challenges associated with obtaining the required capabilities within the desired size.