The study of underwater vehicle wake detection is of significant importance within the field of target detection, localisation, and tracking of underwater vehicles. Given that propellers are the propellers of modern ships and underwater vehicles, the propeller wake field represents the principal target source for wake detection in underwater vehicles. The objective of this paper is to propose a method for measuring the wake of an underwater propeller based on a position-sensitive detector. A theoretical model of the relationship between the laser spot displacement and the change in the refractive index of the wake field is established on the basis of the principle of laser beam deflection. A prototype experimental setup for underwater propeller wake measurement was constructed based on the aforementioned optical measurement method. Furthermore, the simulation of the propeller wake flow field with strong density stratification and linear density stratification was conducted based on the experimental setup. Furthermore, experiments were conducted to detect the flow field of a propeller wake. The experimental results indicate that the wake dissipation times of the propeller in a strong density-stratified water environment are approximately 800 s and 750 s. Following the stabilisation of the wake field density, the laser spot position is observed to be stable at 0.341 mm and 0.441 mm, respectively, with a corresponding refractive index change of 2.99 × 10−6 RIU (refractive index unit) and 3.87 × 10−6 RIU, respectively. These experimental results are found to be in general agreement with the simulation results of the propeller wake field. A comparison of the experimental wake measurements based on the device with the wake measurements based on a CTD (conductivity–temperature–depth) device reveals a consistent trend. The realisation of this detection technique is of great significance for the advancement of research in the field of optical detection of underwater vehicle wake streams.