We present a detailed description of the fabrication and operation at room temperature of a novel type of tunnel displacement transducer. Instead of a feedback system it relies on a large reduction factor assuring an inherently stable device. Stability measurements in the tunnel regime infer an electrode stability within 3 pm in a 1 kHz bandwidth. In the contact regime the conductance takes on a discrete number of values when the constriction is reduced atom by atom. This reflects the conduction through discrete channels. ©1995 American Institute of Physics.