A lift apparatus and method for driving a downhole reciprocating pump is disclosed and includes a hydraulic cylinder having a piston and a hydraulic fluid port, the piston being coupled to a rod for driving the reciprocating pump, the piston being moveable between first and second ends of the cylinder in response to a flow of hydraulic fluid through the hydraulic fluid port. A variable displacement hydraulic pump is responsive to a displacement control signal to draw hydraulic fluid from a reservoir and to produce a controlled flow of hydraulic fluid at the outlet. The apparatus also includes a valve connected between the hydraulic fluid port and the reservoir, the valve being responsive to a valve control signal for controlling discharge of hydraulic fluid from the hydraulic fluid port of the cylinder back to the reservoir to facilitate movement of the piston through a downstroke away from the second end toward the first end of the cylinder. The apparatus further includes a first sensor located proximate the first end of the cylinder and operable to produce a first signal indicating a proximity of the piston to the first sensor, a second sensor located proximate the second end of the cylinder and operable to produce a second signal indicating a proximity of the piston to the second sensor, and a controller operably configured to generate the displacement control signal and the valve control signal in response to receiving the first signal and the second signal.