This paper reviews studies on the types and functions of oil sensors used for machine condition monitoring. Machine condition monitoring is essential for maintaining the reliability of machines and can help avoid catastrophic failures while ensuring the safety and longevity of operation. Machine condition monitoring involves several components, such as compliance monitoring, structural monitoring, thermography, non-destructive testing, and noise and vibration monitoring. Real-time monitoring with oil analysis is also utilized in various industries, such as manufacturing, aerospace, and power plants. The three main methods of oil analysis are off-line, in-line, and on-line techniques. The on-line method is the most popular among these three because it reduces human error during oil sampling, prevents incipient machine failure, reduces the total maintenance cost, and does not need complicated setup or skilled analysts. This method has two advantages over the other two monitoring methods. First, fault conditions can be noticed at the early stages via detection of wear particles using wear particle sensors; therefore, it provides early warning in the failure process. Second, it is convenient and effective for diagnosing data regardless of the measurement time. Real-time condition monitoring with oil analysis uses various oil sensors to diagnose the machine and oil statuses; further, integrated oil sensors can be used to measure several properties simultaneously.