Using the finite element method (FEM) and particle swarm optimization (PSO), a nonlinearity analysis based on parameter optimization is proposed to design an inductive angle sensor. Due to the structure complexity of the sensor, understanding the influences of structure parameters on the nonlinearity errors is a critical step in designing an effective sensor. Key parameters are selected for the design based on the parameters' effects on the nonlinearity errors. The finite element method and particle swarm optimization are combined for the sensor design to get the minimal nonlinearity error. In the simulation, the nonlinearity error of the optimized sensor is 0.053% in the angle range from -60° to 60°. A prototype sensor is manufactured and measured experimentally, and the experimental nonlinearity error is 0.081% in the angle range from -60° to 60°.