Monitoring oil quality on-line has become an important issue in today’s military, transportation and manufacturing industries. Although laboratory analysis procedures are comprehensive and detailed, they do not provide the timely information about oil for the aircraft health management. Condition monitoring is a preventive maintenance tool which has been used for over 50 years. In this paper we discuss several aircraft oil analysis methods and instruments or sensors. A new methodology of the aircraft oil health management is presented. It can assist realizing autonomous maintenance and dramatically reduce maintenance costs through the data integration from individual oil monitoring sensors. It offers a more comprehensive figure of the whole situation and a more accurate evaluation of the system condition. Therefore the aircraft safety will be greatly improved.