<p>Rotational speed is one of the critical parameters for evaluating the operating status of rotating machinery. For its detection, a kind of soft-magnetic particle was selected, called carbonyl iron particles (CIPs), having excellent magnetic response characteristics. A sensitive unit based on the magnetoresistance effect was designed in combination with CIPs for sensing the rotational speed, being called the magnetoresistance sensitive unit (MRSU). The magneto-induced performance of the MRSU was investigated by using a self-built experimental system, and the magnetoresistance characteristics of the MRSU were studied through static and dynamic magnetic field-dependent experiments. The mechanism of the magnetoresistance effect was explored and analyzed from the microscopic level, and the relationship between the resistance and the excitation magnetic field was qualitatively deduced. Different test rotational speeds were set in this study, and the output voltage signals of the voltage dividing circuit were used to characterize the rotational speed. The research results show that the range of magnetic field effects on CIPs can be divided into a magnetic working region and a magnetic saturation region, and the excitation magnetic field had a significant impact on the magnetoresistance effect of the MRSU, for both the absolute and the relative magnetoresistance effect within the magnetic working range. In addition, the MRSU exhibited periodic pulse output signals that were consistent with the rotational speed at different test values, indicating that it not only offered very good accuracy but also possessed good temporal stability. The MRSU showed exhibited good magneto-sensitive performance and a stable response, enabling a novel approach for rotational speed detection.</p>