Photoluminescence of salicylic acid (SA) and its sodium salt in poly(vinyl alcohol) (PVA) film and its quenching by water/moisture has been studied by steady-state and time domain fluorescence measurements. The results suggest that salicylic acid is completely ionized and present as a monoanion in PVA film, having a molar extinction coefficient (epsilon(max)) of 3545 M-1 cm(-1), and its emission shows a large Stokes shifted (similar to8300 cm(-1)) fluorescence band with a quantum yield (phi(f)) of 0.34 and a decay time (tau(f)) of 6.7 ns. This emission band is due to excited-state intramolecular proton transfer (ESIPT) and is found to be sensitive to moisture and water contents in organic solvents. The films dipped in organic solvents, viz. dioxane, ethanol, and acetonitrile, containing water shows Stern-Volmer type fluorescence quenching. It is shown that a linear quenching of fluorescence intensity and decay time of SA doped PVA film in the presence of moisture or water in the organic solvents can be useful as an optical sensor for determination of humidity in the range 5%-85% and water contents in these solvents in the range 1%-60% with an accuracy of +/-0.2%. The response time of the sensor film is about 2 min, and recovery time is less than 1 min.