The wear debris in hydraulic oil or lubricating oil has a wealth of equipment operating information, which is an important basis for large mechanical equipment detection and fault diagnosis. Based on traditional inductive oil detection technology, magnetic nanoparticles are exploited in this paper. A new inductive oil detection sensor is designed based on the characteristics of magnetic nanoparticles. The sensor improves detection sensitivity based on distinguishing between ferromagnetic and non-ferromagnetic wear debris. Magnetic nanoparticles increase the internal magnetic field strength of the solenoid coil and the stability of the internal magnetic field of the solenoid coil. During the experiment, the optimal position of the sensor microchannel was first determined, then the effect of the magnetic nanoparticles on the sensor’s detection was confirmed, and finally the concentration ratio of the mixture was determined. The experimental results show that the inductive oil detection sensor made of magnetic nanoparticle material had a higher detection effect, and the signal-to-noise ratio (SNR) of 20–70 μm ferromagnetic particles was increased by 20%–25%. The detection signal-to-noise ratio (SNR) of 80–130 μm non-ferromagnetic particles was increased by 16%–20%. The application of magnetic nanoparticles is a new method in the field of oil detection, which is of great significance for fault diagnosis and the life prediction of hydraulic systems.