The invention discloses a magneto-rheological damper of an inbuilt displacement sensor, which is composed of a working cylinder, a piston of which the core is provided with big and small pores, a piston rod, an inbuilt pipe and a displacement sensor, wherein the working cylinder is filled with magneto-rheological fluid; when the piston rod pushes the piston to move in the working cylinder, the inbuilt pipe enters or retracts from the big pore of the piston while the piston rod enters or retracts from the working cylinder; because the external diameter of the piston rod is same with that of the inbuilt pipe, the volume of the working cylinder is constant; the movement of the piston drives a sliding axle of the displacement sensor arranged in the inbuilt pipe to move, so that the displacement sensor arranged in the inbuilt pipe can output the signal of piston real-time displacement amount.