To satisfy the requirement of encoder miniaturization,a fire-new encoding method and inimitable design structure of reading head are proposed to develop super miniature virtual absolute encoder.The new encoder adopted virtual absolute encoding method and single reading head.The new method combined distance-coded method with incremental encoding method and only used two rings in favor of miniaturizing encoder.This new encoder designed many absolute references in the whole disk,which quickly acquired current absolute position of code disk.Due to using single reading head,the technology of phase compensation was adopted to minish the size of structure.It has smaller size(Φ25 mm) and lighter weight,and the resolution can achieve 16 bits with processing error analysis and electric subdivision.