The low cost non-intrustive torque transducer is added to an existing drive train. It measures directly the engine output torque with short response time. The angular deflection at both ends of the crankshaft is detected by two non-contacting encoder-pickup combinations. The phase angle between the pulse trains from the encoders is proportional to the shaft deflection and therefore a measure of the engine output torque. A low-cost digital circuit samples and processes the raw torque data. This digital concept provides for stable transducer operation independent of motor speed and varying ambient temperatures. The transducer is rugged and insensitive to variations of temperature, humidity, condensation, oil or dirt contamination. The starter motor teeth on the flywheel provide one encoder, the second encoder is mounted on the fanbelt drive wheel. The transducer output signal can be configured to be either an analog dc voltage or a microprocessor compatible digital data word.