Intelligence and flexibility are essential in a mechatronic product. To achieve the primary function of an integrated system, it is essential that the functional interaction and spatial integration between mechanical, electronic, control, and information technologies be accomplished in a synergistic way. Sensors are as important in the mechatronic system as the senses are to the human being. While the subject of sensors and the need of sensors are certainly important, it is also both pervasive and diffuse. This paper cannot in any sense be exhaustive of such a wide range of discussion, and will only attempt to discuss sensors related to mechatronics. In this paper, the role of sensors in the field of mechatronics has been identified, followed by the characterization of different sensing technologies. The discussion of microsensor technologies, advantage of microsensors, and problems with microsensors together with multisensor fusion applications is presented. An example of a capacitive micro proximity sensor using micromachining technology developed by the Center of Robotics and Intelligent Machines at North Carolina State University is also described.