This thesis describes the optimization and characterisation of an integrated fluxgate sensor. It is fabricated with a CMOS-compatible technology for planar coils with ferromagnetic cores. Limitations of sensor measurement range and linearity are analyzed by analytical and numerical calculations of stray fields and demagnetizing effects in the cores coupled with signal analysis of the calculated coil output voltage. The sensor resultion is limited by magnetic domain effects. Based on these results the sensor layout is optimized for the compass application. Electrical and magneto-optical methods for on wafer characterisation of the ferromagnetic layer, the electrical and magnetical coil parameters and the sensor itself are developed and meet production requirements.