A Magneto-Impedance ( MI ) effect which exhibited the strong dependence of impedance on external magnetic field was found in amorphous wire by Mohri etc. four years ago. It is well known that the Magneto-Impedance ( MI ) effect is a new magnetic field detection principle and presents a possibility of achieving magnetic sensors with high performance. Therefore, our research interest has focused on MI phenomenon in thin film element, taking account of compatibility with circuit and easiness of installation. We have proposed a multi-layered thin film element with the MI effect, which consists of the Cu layer covered with amorphous magnetic layers and the magnetic layers with magnetic anisotropy added in the transverse direction of the element. The MI effect in this multi-layered thin film element is much superior to that in conventional wire element. As a result, when an external magnetic field was applied, a high impedance change ratio was achieved, such as 100% / 10 Oe, and is much higher than that of any other element having MI effect. This thin film element utilizing MI effect has the advantages of small size, light weight, high resolution, and quick response. Therefore, this thin film element is useful not only for application of rotary encoder, but also for sensing purposes of ( various physical quantities such as ) displacement, current and direction.