This paper presents a signal processing tool that efficiently performs piezoelectric (PZT) sensor diagnostic and validation. Validation of the sensor/actuator functionality during structural health monitoring (SHM) operation is a critical component to successfully implement a complete and robust SHM system, especially with an array of PZT active-sensors involved. The basis of this method is to track the capacitive value of PZT transducers, which manifests in the imaginary part of the measured electrical admittance. Both degradation of the mechanical/electrical properties of a PZT transducer and the bonding defects between a PZT patch and a host structure can be identified by the proposed process. However, it is found that the temperature variations in sensor boundary conditions manifest themselves in similar ways in the measured electrical admittances. Therefore, we examine the effects of temperature variation on the sensor diagnostic process and develop an efficient signal processing tool that enables the identification of a sensor validation feature that can be obtained instantaneously without relying on prestored baselines. This paper concludes with experimental results to demonstrate the effectiveness of the proposed technique.