This paper presents a novel interface circuit design for an accurate measurement of water contents in crude oil by using differential capacitive sensors; the latter are immersed in two different liquids. One of them is a pure crude oil considered as a reference medium and the other medium is a mixture of water and crude oil which considered as a liquid under test. The dielectric permittivity of oil-water mixture is being used for water contents measurement. Sensor is placed in different concentrations of oil and water which directly affects the capacitance of the sensor. This above capacitance variation is converted to a voltage change which in turns measured by an interface circuit. The simulation has been carried out to confirm the performance of the circuit. The results show that the proposed interface circuit has the ability to measure the water contents with accuracy and stability. © 2012 IEEE.