A confocal laser displacement sensor using a micro-machined varifocal mirror is reported. The focal length modulation is a key function of the confocal sensor. The mechanism of the focal length modulation determines the measurement speed and range. Here, we propose application of the micro-machined varifocal mirror for the modulation. The varifocal mirror can realize faster modulation, small size, and low energy consumption for the confocal displacement sensor. The electrostatically actuated varifocal mirror made by single crystalline silicon is used. The working distance of the sensor is designed to be 31 mm. The actuating range at 7 kHz is 310 μm. The linearity error in the actuating range is from −1.1% to 1.2%.