A fiber-optic sensor is described in which an optical retardation plate is used to encode rotary displacement information as a notched minimum in a broadband optical signal. As the waveplate is rotated, the optical beam experiences a variable linear retardation. The signal wavelength at which the retardation is exactly one-half wave exhibits a minimum intensity transmission. The wavelength of the intensity minimum is then a function of the rotation of the retardation plate. The theoretical prediction of the sensor's performance is developed and compared to experimental results.