A realtime disccutter wear monitoring system of shield machine based on eddycurrent sensor is established so as to control the wear and working status of disccutter. The distance variations between disccutter ring and sensor are turned into electrical signal and then based on which the wear of disccutter ring can be calculated. The detection mechanism of eddycurrent sensor is discussed emphatically. The noncontact eddycurrent sensor with compact structure and high detecting accuracy is designed. The temperature compensation is carried out in a project and realtime disccutter wear monitoring is realized. The testing results illustrate that the eddycurrent sensor is feasible for the monitoring system. 