An instrumented model pile has been realized to study the displacement pile installation effects in sand in physical model tests. The system includes a model pile, instrumented with axial and horizontal contact stress sensors, and a corresponding calibration apparatus. The development of the instrumented model pile, including numerical analysis of the mechanical response during testing, and an optimization of the instrumentation to minimize thermal effects are described. The performance of this new model pile is demonstrated using calibration measurements and an example application in a physical model test at an elevated stress level in the geotechnical centrifuge.