Abstract: Magnetic incremental permeability detection method was investigated to resolve the problem of measuring the thickness of ferromagnetic layer on the ferromagnetic component surface. During the incremental permeability detection process, a variety of magnetic parameters were measured and applied for non-destructive characterization of layer thickness. Nickel-coated 65Mn steel plates were used as test samples. Digital filtering tool was employed to separate the concerned signal from the measured magnetic responses superimposed by low and high frequency components. Orthogonal demodulation together with related digital signal processing techniques was used to extract multiple magnetic parameters from the curves of tangential magnetic field, eddy current impedance and magnetic incremental permeability. Linear fitting method was used to evaluate the performances (represented by the linear correlation extent and normalized sensitivity) of individual parameter on characterizing the nickel layer thickness. The magnetic parameters with small dispersion for repeated test results and high normalization sensitivity were selected for high-performance nickel layer thickness measurement on 65Mn steel plate.