We propose a linear encoder which utilizes Terahertz (THz) wave and polarization information. The encoder consists of a polarization angle reader as a read head and a periodic polarizer linear array as a scale. The read head determines its position based on polarization angle on the scale. This technology has possibility to have resistance to fine particles and gap fluctuation between the read head and scale. We experimentally demonstrated that the linear encoder based on the terahertz polarimetric sensing is useful for the industrial applications.