Modern applications in industry, navigation and medicine demand small and sensitive magnetic field sensors. In this thesis we have developed a new planar micro fluxgate magnetometer. High resolution, low power consumption and orthogonal fields detection makes it suitable for portable compass applications. The developed sensor is a fully integrated device based on CMOS process that provides driving and readout electronics, plus the metallization layers for the excitation and pickup coils. A soft amorphous ferromagnetic material is bonded and structured, using an additional, postprocess implemented on a whole 6 inch wafer to form sensor core on the surface of the chip. The single core principle was selected with the intention to elongate the core, reduce the power consumption and increase sensitivity. We employed a new extraction method, based on the detection of mean value of the induced voltage peaks in the pickup coil, which carry the information on the external field. Several models and tools for the optimization of the core geometry, excitation, as well as pickup coils have been developed. For the first time, the effect of perming has been investigated. Perming is manifested as a change in sensor offset after the magnetic shock. A model was developed, which uses equivalent magnetic pole pieces to account for the contribution of the "frozen" domains not affected by the excitation. Model shows that the effect is predominantly dependent on the level of the core saturation. The electronics has been integrated in a conventional 1 µm CMOS process. Apart from the excitation, a single electronic circuit is used for both axes in order to decrease the power consumption, reduce the chip size, and obtain better matching. The signal extraction principle is accomplished using a box-car circuit. To reduce the influence of the 1/f noise of the amplifiers, we implemented a modulation technique, using an additional modulator. Modulated signal is amplified and finally demodulated using the correlated double sampling demodulator. We have implemented a new digital feedback, for the first time applied on the excitation coils. It consists of comparator, 8-bit U/D counter and current sources to create magnetic field for contra action. The output of the counter represents the digital information on the external field and is transmitted using I2C communication block integrated on chip. The fabricated sensor works from a single 2.5 V power supply and consumes 8.5 mW in open loop mode and 10 mW with a feedback. With the excitation at 350 kHz, the magnetometer exhibits the sensitivity of 2950 V/T and 8 kHz bandwidth. Equivalent noise spectral density at 1 Hz is equal to 12 nT/√Hz. When used as a compass, the sensor has the angular error of ± 1° without and ± 3° using feedback. Measured perming is equal to 1.4 µT, after the shock of 200 mT. Performance of the developed micro-fluxgate is better in terms of noise, angular error, perming, operational voltage, as well as power consumption, than any other fully integrated micro fluxgate presented up to date. In addition, the fabrication is based on the batch and low cost CMOS technology and compatible post-process so we can expect commercialisation in the near future.