An implantable medical sensor (42) determines the oxygen content of blood. The sensor includes a miniaturized hybrid circuit (130) that includes light-emitting diode means (32), phototransistor means (34, 36), and a substrate (110) to which the light-emitting diode means and phototransistor means are bonded in a desired circuit configuration. The hybrid circuit is hermetically sealed within a cylindrical body (140) made from a material that is substantially transparent to light, such as glass. Feedthrough terminals (132, 134) provide means for making an electrical connection with the hybrid circuit. The light-emitting diode means is driven with a stair-stepped current pulse. In one embodiment, the sensor is embedded within a bilumen pacemaker lead (60) and positioned near the distal electrode (66) of the lead so that the sensor resides within the heart when the lead is implanted within a patient, thereby allowing the sensed oxygen content (MVO.sub.2 concentration) of the blood within the heart to be a physiological parameter that can be used to control the pacing interval of a rate-responsive pacemaker (56).