The examination of the application and accuracy of optical sensors for the purpose of determining rail lubricity of top-of-rail friction modifier is investigated in this research. A literature review of optical sensors as they relate to detecting thin layers is presented, as well as a literature review of the significant aspect of surface roughness on optical signature. Both commercially available optical sensors and optical devices, such as independent lasers and detectors, are examined in a comprehensive parametric study to determine the most suitable configuration for a prototype with adequate third-body detection. A prototype is constructed considering parameters such as sunlight contamination, vibrations, and angle of detection. The prototype is evaluated in a series of laboratory tests with known lubricity conditions for its accuracy of measurements and susceptibility to environmental conditions, in preparation for field testing. Upon field testing the prototype, the data indicates that it is capable of providing subjective measurements that can help with determining whether a rail is highly lubricated or unlubricated, or it is moderately lubricated. It is anticipated that the device could be used to provide a rail lubricity index. The investigation of the optical response of a rail in various conditions, including top-of-rail friction modifier presence and underlying surface roughness, reveals the behavior of friction modifying material on rail/wheel interactions. It is determined that surface roughness is imperative for distinguishing between scattering due to surface condition and scattering due to third-body layers. Additionally it is revealed that friction modifying materials become entrapped within the surface roughness of the rail, effectively causing a "seasoning" effect instead of a simple third body layer. This provides some explanation on the inadequacy of determining lubricity conditions using contacting methods since they cannot detect the entrapped material that are revealed only when the top of rail undergoes a micro deformation due to a passing wheel. Furthermore, the fluorescent signature of flange grease can be utilized to detect any flange grease contamination on top of rail. The results of the study indicate that it is possible to have practical optical sensors for top-of-rail third body layer detection and any contamination that may exist, initially through spot checking the rail and eventually through in-motion surveying. / Master of Science