Optical Feedback Interferometry, also known as Self-Mixing, results in compact, selfaligned and contact-less sensors. In this phenomenon, a portion of the laser beam is back reflected from the target and enters the active laser cavity to vary its spectral properties. The laser diode then simultaneously acts as a light source, a micro- nterferometer as well as a light detector. In this thesis, a self-mixing displacement sensor has been optimised so that precise measurement can be obtained in real-time. The sensor is robust to the disappearance of self-mixing fringes for harmonic vibrations. It is also able to auto-adapt itself to a change in the optical feedback regime and so can extract displacement from the weak as well as moderate feedback regime signals. The use of adaptive optics, in the form of a liquid lens, has also been demonstrated for this sensor, which has allowed us to maintain the sensor in a fringe-loss less regime. The influence of speckle has also been reduced so that the sensor can now measure up to the centimetric range for non-cooperative targets. A novel technique has also been presented that makes the sensor insensitive to parasitic mechanical vibrations that would falsify the measurement under industrial conditions
