This paper presents an in-process measurement system for shaft radius measurement during grinding process. This system does not require to stop the grinding process, which can enhance productivity and quality. In order to measure the radius, the system employs an eddy current sensor that can measure without any contact with the shaft. This type of sensor is very appropriate because it is insensitive to interference such as cutting fluid, coolant, contact pressure, and wear. For data analysis, the measurement system is modeled as a linearized discrete form where the states with noise are estimated by an extended Kalman filter. This system has been validated through simulations and experiments.