A sensor for sensing the level of oil or transmission fluid under both normal and extreme temperature conditions. The only active components of the sensor have input and leakage currents substantially lower than those of diodes and current sources under high temperature conditions. The sensor has a probe, including a pair of electrodes forming a level detecting capacitor, adapted to extend in the vessel to detect the level of the liquid. A reference capacitor is included which has a capacitance substantially the same as the capacitance of the level detecting capacitor when no dielectric liquid is present between the electrodes of the level detecting capacitor. Circuitry is provided for measuring the capacitance of each capacitor and for deriving from the capacitance measurements a signal proportional to the level of the dielectric liquid at the sensor. Circuitry is also provided for testing whether the reference capacitor is operating properly. One of the electrodes of the level detecting capacitor is insulated to render the output of the sensor independent of high temperature conductivity effects. Structure and a method are provided for compensating for varying dielectric constants of the oil or transmission fluid in which the sensor is immersed.