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A sensor that automatically determines the interface between two different fluids flowing through a pipeline is needed primarily by the dairy industry. The need is especially critical for process operations where multiple fluids possessing large differences in optical characteristics are processed on the same line. The objectives of this research were to develop an algorithm for an optical transmission sensor that would determine both the interface and its duration based on a derivative analysis of the signal and to characterize the effect of pipe length and pipe flow velocity on the transition time at a fixed diameter. Pasteurized skim milk was processed at pipe flow velocities of 0.91, 1.37, and 1.83 m/s through a pipe system having lengths of 5.97, 15.72, and 25.48 m. Unpasteurized raw milk was also processed at pipe flow velocities of 1.37 and 1.52 m/s through the same pipe system. Results showed that the transition time was directly proportional to pipe system length and inversely proportional to pipe flow velocity. The transition sensor algorithm successfully detected transitions involving dairy products and estimated the transition times for the conditions tested. Further assessment of the developed transition sensor system suggested that it could be used for transitions involving dairy products and ready-to-serve juices.