A novel laser time-of-flight flow sensor has been developed. A specially designed holographic optical element (HOE) constitutes the basis of the optical front end of the sensor. The multifunctional HOE maintains both the transmitting and receiving functions of the optical front end and is designed so that the alignment of the optical system is independent of small changes in the wavelength and temperature. This makes it possible to use a laser diode and makes the optical front end very compact and robust. The HOE is produced as a high-efficiency surface relief grating, thus making a large-scale production through polymer replication possible. The design and fabrication of the HOE is described and the stability of the sensor system is discussed with respect to wavelength variations. Direct calibration measurements on the sensor and test velocity measurements are presented. The sensor is intended for water flow measurements in pipes and can also be used for velocity measurements of solid surfaces.