The invention relates to linearity auto-compensation fixed frequency amplitude modulation electrical eddy current displacement transducer. It includes probe, coaxial cable, and preamplifier circuit. The coil of the probe adopts palladium-silver enameled wire. The coaxial cable structure includes inner conductor, inner insulating layer, inner shielding layer, isolating layer, outer shielding layer and isolating protective sleeve. The inner conductor is formed by many Mn, Cu, and Ag alloy wires. Inner and outer shielding layers are formed by gold-plate copper wire net. The others are made by polytetrafluoroethylene. The preamplifier circuit includes high frequency oscillating circuit, linearity compensation circuit, high frequency oscillating control circuit, linearity correcting circuit, detection circuit, filter circuit, temperature compensation circuit, amplification circuit, and follower. The invention has outstanding temperature compensation character, can ensure transducer precision in big temperature difference range by stabilizing its non-linear degree in small area.