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RFID system to detect oil degradation was developed in this study. For detecting oil state, capacitive IDT (Inter -Digit Type) sensor was fabricated with MEMS process, and passive type RFID has no power source itself. The power to operate sensor and circuit was provided from RFID reader using low frequency 125 kHz. The engine oil based mineral oil was periodically extracted from a vehicle for as experimental samples for this study. A circuit using low power consumption microprocessor with comparator was used to analyze the signals from sensor, transmit and receive the energy from the reader. The microprocessor measured an electronic charge time derived to the capacitive sensor. The result of experiments showed that this system can be applied to monitor not only the degradation of automotive engine oil but also indicate the proper change time of oil.