LiCl-Li2O salt is a widely used electrolyte for the electrochemical reduction of spent oxide (mainly uranium oxide) fuels, and the Li2O concentration is usually controlled at about 1.41 mol % for optimum operation and corrosion mitigation of the platinum anode material. Due to the small difference in reduction potential between UO2 and Li2O, some Li2O will be reduced during the oxide reduction process, leading to a Li2O deviation from the desired 1.41 mol %. Monitoring of the Li2O concentration is desired for proper control of the electrochemical oxide reduction process. In this paper, a Li2O sensor based on a yttria stabilized zirconia (YSZ) membrane was developed and tested to evaluate the feasibility of using the Li2O sensor to monitor the Li2O concentrations in the range of 0.57 to 1.69 mol % Li2O in LiCl-Li2O salt systems—one without dissolved Li metal and another with 0.24 mol % dissolved Li metal. The experimental results show that the open circuit potential of the Li2O sensor logarithmically responded to the concentration of Li2O in LiCl-Li2O salts with or without the presence of Li metal, suggesting that YSZ appears promising for real-time monitoring of the Li2O concentration in LiCl-Li2O salt for an oxide reduction process. The Li2O sensor developed herein is based on a potentiometry measurement that requires a stable, reliable reference electrode (RE), particularly for long-term Li2O concentration monitoring. To this end, a novel Ag/AgCl RE that is contained in a high-density MgO tube with a closed end was developed and exhibited stable electrode potential, chemical compatibility with LiCl-Li2O, and good mechanical strength. The performance of the newly developed Ag/AgCl RE was demonstrated in Li2O monitoring by comparing it with a traditional Ni/NiO RE.