Rotary encoders are present in many electronic devices, and are used to measure changes in rotation. The common photo type encoder has remained largely unchanged in its fundamental operation, and faces limitations in resolution at small sizes. This research explores an encoder design utilizing polarizers, that can achieve higher resolutions than similarly sized photo encoders. Current photo encoders achieve their rotational measurements through a rotating disk, with perforations located along the circumference. As the disk rotates, a photodiode receives pulses of light through the perforations from a light source. The resulting signal(s) consists of a multitude of digital pulses that require compiling and processing, before position can be determined. To achieve higher resolutions, more perforations are required, and more photodiodes are needed. High-resolution encoders can therefore become very expensive as the perforations increase, and the perforations, and therefore resolution, is limited at smaller sizes. However, there is a way to inexpensively achieve indefinite resolution and absolute position, at sizes that are unfeasible with current encoder technologies. Such an encoder utilizes an initially polarized light source, followed by an analyzer polarizer, and then a photodiode. As the analyzer is rotated, the photodiode receives a gradually increasing, and then decreasing, change in brightness (translating into current). Rotating the analyzer continuously, produces a sine graph of current change, with each point corresponding to a position of the analyzer. In this research, this configuration has been adapted to create a small scale, and high-resolution rotary encoder. This polarizer encoder measures only ten millimeters in diameter, and achieves greater resolution than current similarly sized rotary encoders.