This paper presents an investigation of the solubility of water in conventional and environmentally considerate lubricants using relative humidity sensor technology. Environmentally considerate lubricants are increasingly used in fluid power applications because of their renewability and biodegradability. Biodegradable fluids are often employed in ecologically sensitive areas; moisture contamination is difficult to avoid in these places. Moisture is a concern because water contamination causes premature wear in machinery and degradation of lubricants. One means of remediating water contamination in oils is to use water-absorbing filters. Water-absorbing filters were evaluated in a laboratory test rig. The filters were effective in reducing the free and emulsified water content of test fluids, but dissolved water was not removed. The dissolved water content of the environmentally acceptable lubricant was relatively high at the end of the filtration test. To further understand these results, we examined the solubility of water in three engine oils, four hydraulic oils, and two biodegradable oils at various temperatures using a submersible relative humidity sensor. Relative humidity measurements were correlated to the water concentration of the fluids using a benchtop moisture analyzer. The relationship between oil additive element concentrations and the dissolved water content was explored.