The results of an investigation directed at evaluating the feasibility of using optical measurements for the real-time monitoring moisture and particulate in geothermal steam is described. The measurements exploit new technologies that have been developed for the telecommunications industry and includes new solid state laser devices, large-bandwidth, high-sensitivity detectors and low loss optical fiber components. In particular, the design, fabrication, and in-plant testing of an optical steam monitor for the detection of moisture is presented. The measurement principle is based upon the selective absorption of infrared energy in response to the presence of moisture. Typically, two wavelengths are used in the measurements: a wavelength that is strongly absorbed by water and a reference wavelength that is minimally influenced by water and steam which serves as a reference to correct for particulate or droplet scattering. The two wavelengths are chosen to be as close as possible in order to more effectively correct for scattering effects. The basic instrumentation platform developed for the in-situ monitoring of steam moisture can be modified and used to perform other measurements of interest to plant operators.