Health has been one of the most significant considerations in the fortification of human civilization. A lot of resource has been used in health sector to aid mankind fight diseases of all kinds. Different researches are ongoing for development of sophisticated high precision devices which make medical services reliable and accurate. Pulse oximeter is one of such device popularly used in hospitals to monitor the saturation of oxygen concentration in blood cells for patients having risk of respiratory failure. Hemoglobin the colored substance in blood is a carrier of oxygen. It combines with oxygen to form oxidized hemoglobin. The absorption of light by hemoglobin varies with oxygen concentration. Hence by measuring the light transmitted (or calculating the attenuation of light) through the fingertip (or the earlobe) at two different wavelengths, one in the red and the other in the near infrared part of the spectrum, the oxygen saturation of the arterial blood in the finger (or ear) can be determined. This project implements the theory of pulse oximetry using a sensor that senses the amount of light transmitted through the blood cells. Filters and amplifiers are used to attenuate unwanted noise and dc level and amplify the desired portion of the signal. Analog to digital converter is used to digitize the signal which will be fed to the microcontroller to calculate oxygen saturation in the blood through the conventional formulas developed. Finally the result i.e. the oxygen saturation will be displayed on LCD which is interfaced via the microcontroller. For patients under intensive care pulse oximeter is indispensable as it is very important to monitor oxygen concentration in their blood in a continuous basis. In this project we have tried to implement all our knowledge gained to develop a system having high practical significance.