Magnetic sensing NDE(non-destructive evaluation) method was applied to detect local damages at the steel chain of the escalator. To verify the feasibility of the magnetic sensing based chain inspection method, a magnetic sensor head was fabricated to adapt to the target chain. The fabricated sensor head scanned the notch damaged chain specimen to measure the magnetic flux signals. After obtaining signal, a series of signal processing process including pick picking and enveloping process based on Hilbert transform (HT) was performed to detect the damaged point by clarifying the signal.