Terahertz time-domain spectroscopy (THz-TDS) is used to investigate the water content in synthetic oils. For this purpose, water was added to polyglycol oils, which are able to dissolve a certain percentage of water. Applying THz-TDS, changes in the absorption coefficient and refractive index are observed and characterized. Comparison of the experimental data with predictions based on Beer-Lambert and Lorentz-Lorenz-theory, respectively, exhibits excellent agreement and clearly indicates that water is not dissolved in form of clusters but rather via hydrogen-bonded oil-water complexes. (c) 2006 Elsevier B.V. All rights reserved.