In order to obtain accurate quality control of steel products, it is desirable to be able to monitor the mechanical properties non-destructively. This study proposes using an electromagnetic (EM) sensor, suitable for use on strip samples, as a tool for non-destructive steel characterisation, in particular phase balance and grain size in dual phase (DP) steels and hence strength. It is known that the low frequency inductance measured using an EM sensor depends on the relative permeability of the sample and that the permeability is affected by microstructural features (i.e. phase fraction/distribution and, to a lesser extent, grain size are the important features in DP steel). EM sensors can be used to characterise austenite and ferrite fraction in hot strip mills (EMspec^TM system) and for statistical correlations to mechanical properties (IMPOC and HACOM systems) in cold strip mills. In this paper an EM sensor system and a finite element based sensor – microstructure model have been used to characterize DP microstructures (using commercial DP600, DP800 and DP1000 grades and a heat treated DP600 grade) taking into account the effect of strip thickness on the signals. This paper also reports on the relationship between the ferrite fraction and tensile strength, which follows the expected relationship from the literature, and the magnetic permeability (determined from the EM sensor signal which is directly related to ferrite fraction and grain size) and tensile strength. The ability of the EM sensor to determine the tensile strength is therefore illustrated taking into account strip thickness and microstructure.