This paper describes the design and fabrication of an optical sensor to sense vertical displacement of a diamagnetically stabilized levitating rotor. The planar rotor described in this paper rotates due to nine electromagnetic coils evenly spaced around the rotor. A driving circuit allows current to flow through the coils one phase at a time. This produces a magnetic field strong enough to spin the rotor. However, instability due to a number of factors is prevalent in the present system. This instability is observed as vertical and horizontal displacement of the levitating rotor. The purpose of an additional optical sensor is to measure and record this vertical displacement and combine it with topsensing optical measurements in order to create a three-dimensional optical sensing mechanism around the rotor.© (2011) COPYRIGHT Society of Photo-Optical Instrumentation Engineers (SPIE). Downloading of the abstract is permitted for personal use only.