The polarization phase sensor (PPS) is an optical sensor capable of measuring absolute displacements between two segments of a spherical mirror. The sensing apparatus consists of a white light polarization interferometer which forms a set of interference fringes representative of the displacement between the two segments. A detector array senses these fringes and computer software performs an analysis. The result of these calculations is a measurement of the absolute misalignment between the two segments. The sensor, in its current configuration, is capable of measuring ±30 &mgr;rad of tilt between the two segments with an accuracy of 3.29 &mgr;rad and a precision of 2.27 &mgr;rad and ±2 &mgr;m of piston between the two segments with an accuracy of 0.00516 &mgr;m, and a precision of 0.031 &mgr;m. This paper will address the optical design and operating characteristics of this sensor. A conclusion will discuss alternate modes of operation and upgrades to the instrument which will increase piston capture range.