In this paper, there has been described the way of measuring propeller shaft deformation using the strain gauges and PCs by means of the non-contact method. On the basis of the known cross-section as well as the propeller shaft material type the torque has been calculated. Knowing the shaft frequency, that is the radial velocity and the torque, it is possible to determine the effective power that has been transmitted from the engine to the propeller. The equipment, that is the hardware and the software that have been used, was produced by Hottinger Baldwin Messtehnik (HBM), Darmstadt, the Federal Republic of Germany. The experiment has been carried out on a ship belonging to the Navy of Serbia and Montenegro in the conditions of the usual sailing regime. .