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Need for non-contact torque transducers in modern power steering systems is identified. Inherent size and complexity of existing transducer designs is shown to discourage their use in this application. A new magnetoelastic type of transducer of unusually small and simple construction is described. The transducing function is fulfilled by just two elements: a circumferentially magnetized ring affixed at a convenient location on any shaft in the torque path between the steering wheel and the steering box, and a magnetic field sensor mounted in proximity to the ring. Stresses in the ring, associated with the torque transmitted along the shaft, cause the ring magnetization to develop an axial component. The resulting magnetic field in the space around the ring has a polarity and intensity correlated with the sense and magnitude of the torque.