Maintenance and reliability are crucial aspects for operating construction equipment in harsh environmental conditions. One of the methods used to improve the maintenance and reliability of construction equipment is oil diagnosis. In this study, monitoring of conditions was performed through the use of an integrated oil sensor for hydraulic oil in construction equipment. Hydraulic oil in construction equipment is polluted by various materials such as moisture and dust. Therefore, the present work investigated the change in the state of hydraulic oil caused by the presence of major pollutants in construction equipment. The degree of contamination of the hydraulic oil was evaluated using an integrated oil sensor that could measure absolute viscosity, density, temperature and dielectric constant. It is difficult to determine the influence of each pollutant source on hydraulic oil. Therefore, a simple experimental device and diagnostic program were constructed to effectively measure variations in the properties of hydraulic oil caused by each contaminant source. In particular, the focus was on the dielectric constant and examination of its usefulness. In addition to testing various contaminant conditions in the laboratory, varnish-contaminated lubricants used in actual construction equipment were verified. The results showed little change in the dielectric constant when introducing dust and improper lubricants. However, the dielectric constant was affected by the incorporation of water and the generation of varnish, which led to evident variations. In particular, a direct correlation was found between varnish contamination and the dielectric constant measured by the oil sensor, and the cause was explained based on the results of elemental component analysis. Therefore, measuring absolute viscosity, density, and temperature when monitoring the condition of hydraulic oil in construction equipment can provide useful information regarding lubricant and machine condition; however, the dielectric constant is most useful in detecting moisture incorporation and varnish contamination caused by oil deterioration.