The mixing of refrigeration oil with refrigerant in a refrigeration cycle has great influence on cycle performance. A sampling method is the most general way to measure the mixing ratio of refrigerant and refrigeration oil. Since the sampling method is time-consuming and reduces the amount of refrigerant and oil in the cycle, a real-time measurement is desirable. In this study, a refractive index measurement was applied to measure the mixing ratio of refrigerant/oil mixture. A laser displacement sensor was used to detect any change in optical path which results from changes of the refractive index of refrigerant/oil mixture. For the practical application of real-time measurement of the oil circulation ratio (OCR) in the refrigeration cycle, a correlation between the refractive index and the mixing ratio was developed. In addition, the changes of the refractive index in a range of a few percentages of the oil concentration and under subcooled conditions were measured. Finally, a transient measurement of the OCR in a practically operating refrigeration cycle was carried out successfully.