This invention relates to a position measuring system for a hydraulic cylinder, which comprises at least one sensor, one magnet and a piston rod with a metallic core of high magnetic susceptibility and with a groove structure in substantially axial direction, wherein the groove structure is filled up with a metal which has a lower magnetic susceptibility than the core, so that the sensor measures a magnetic field of the core which is changed by the groove structure and thus can determine both the relative and the absolute position of the piston rod.