Online condition monitoring of power transmission belts is essential to keep industrial belt-driven equipment functioning smoothly and reliably. This paper presents a smart electrostatic sensor that monitors belt motion through detection of static charge on the belt. A theoretical model is established using the method of moments for calculation of induced charge on strip-shaped electrodes placed in the vicinity of a belt moving both axially and transversely. The sensor unit converts the induced charge into proportional voltage signals using charge amplifiers and measures belt speed and vibration through cross correlation and spectral analysis, respectively. The performance of the smart electrostatic sensor is validated against a photoelectric rotary encoder and a laser displacement sensor. Comparative experimental results show that the belt speed can be measured with a relative error within ±2% over the range 1.7-15.5 m/s. The electrostatic sensor is capable of measuring the frequencies of transverse vibration accurately. Although absolute displacement cannot be measured due to the uncertain level of charge on the belt, the measurement results of relative vibration magnitudes for different modes and at different belt speeds are reasonably accurate.