A valve unit of an internal combustion engine is accommodated in a space between a cylinder head and a rocker cover. The valve unit comprises a camshaft, a variable valve operating mechanism, a sensor, and a retaining member. The camshaft is provided with a cam for each cylinder. The variable valve operating mechanism receives a displacement of the cam, outputs a valve drive output, and continuously variable-controls the valve drive output in accordance with a rotational displacement of a control shaft provided substantially in parallel with the camshaft. The sensor detects the rotational displacement of the control shaft. The retaining member retains the camshaft, the variable valve operating mechanism, and the sensor. The retaining member expose the sensor to the out side of the rocker cover thereby to fix the camshaft, the variable valve operating mechanism, and the sensor to the cylinder head.