Traditional active magnetic damper (AMD) systems rely on external position sensors to measure the mover’s radial position, though these sensors add cost, complexity, failure modes, and potential sources of error due to the axial non-colocation of actuator and sensor. An alternate, so-called “self-sensing” approach seeks to exploit displacement-induced changes in electromagnet inductance to determine mover position; such techniques have been described in active magnetic bearing (AMB) and AMD literature since the 1980s. This paper details a novel, magnetic-saturation tolerant self-sensing approach for AMDs. The theoretical basis is presented; it is validated both experimentally and via a transient magnetic finite-element model. A position estimation error of 4.17 µm (0.164 mils) RMS is experimentally demonstrated over a typical mover position range and a theoretical bandwidth of 250 Hz is achieved.