When the concentration of metal particles in hydraulic oil increases sharply, it indicates that the abnormal wear occurred and the malfunction may cause. Thus the detection of metal particle concentration is one of the methods to monitor the condition of machine online. By used the optical method, the microfluidic detection chip for oil detection was designed and fabricated. A corresponding optical detection system was developed, by selecting iron (Fe) powder with particle size of 10 μm and 20 μm, oil samples with different parameters of condensation grade were prepared, and a lot of detection experiments were done. The testing results demonstrate that 600% increase in signal amplitude can be gotten when increasing the concentration of wear particles. Besides, the signal amplitude increases with increasing of the diameter of wear particles. It also shows the good performance of the detection system, which proves that the optical method is feasible in metal wear particle concentration detection of hydraulic oil.