I need to emulate a component that measures an input mechanically and varies resistance from 0 to infinity (a more detailed set of specs list it at 20-1,000ohms, though I'll have to actually check its true values myself once I have physical access to it).

My aim is to replace this troublesome mechanical component with a current (read as available and serviceable) component, and convert the signal from the new component into an emulated signal (varying resistance) from the old component.

I am not certain as to the resolution required (how big the steps can be), though it may be able to handle 50ohm 'leaps', just judging by the range of mechanical movement and my past experience with replacing similar mechanical systems with ready-made kits for conversions. I'd like to smooth the curve a whole lot more than 50ohm leaps though.

I have barely an idea where to begin on this. I thought maybe a resistor ladder and a set of transistors triggered by the arduino to connect into the different points in the line, though I suspect there has to be a better way to achieve a much better result (and I don't think I have enough outputs for that anyway).

Is there a digital component that can vary its resistance using a PWM signal or maybe an analog signal from an arduino?

FYI, I greatly appreciate your input.