To meet the increased demands of new exhaust and CO2 limits a research project of Volkswagen R&D, the Techni- cal University of Poznan and the Ostfalia University of Applied Sciences has been initiated; its main target was the development and adaptation ICOS (Internal Combustion Optical Sensor) - an infraredsensor of LaVision for on-line measurements of EGR-rate in cylinder of an engine under operation. The objective of the project was to determine by different optical signals the CO2 concentration, the EGR rate and residual gas which are cycle-resolved in the cylinder. In this paper the principle of measurement of optical indication has been described. The infrared sensor was validated by a one-cylinder diesel engine and compared to a synchronously running fast gas sampling system (CSV). Finally the practical application of various parameter variations is illustrated in the determination of the EGR and residual gas rate. Thus a new measurement techniąue for the development offuture generations of engines introduced.