In this study, a concentration monitoring system was successfully developed. A sensor was immersed in electrical discharge machining oil, and the capacitance of the sensor changed as a function of the impurity concentration. Thus, DC voltage variations were produced via a conversion circuit. Carbon black and iron particles with different concentrations were successfully characterized. The capacitance increments were positively correlated with the particle concentration. The linear fitting results based on the impurity concentration were used to express the degree of influence of particles with different weight percentage concentrations on the increase in the overall capacitance value. An equivalent medium theory model was then developed according to the electrical characteristics of the impurities to predict different particle volume percentages.