In order to increase the stability of the inductive oil contaminant detection sensor and improve the detection accuracy of ferromagnetic and nonferromagnetic contaminants, an inductive oil contaminant detection sensor with built-in magnetic nanoparticles was designed in this paper. The solenoid coil was filled with a nanoparticle layer which adsorbs the pollutant particles and enhanced the magnetic field strength of the detection area, enhancing the magnetization and eddy current effects. A 300 μm microchannel was made using the model material, which passes through the sensing unit. Ferromagnetic and non-ferromagnetic contaminants can be distinguished when contaminants pass through the microchannel through the sensing unit. At the same time, two sets of contrast experiments were carried out using two sensors with and without magnetic nanoparticle layers. The experimental results show that the inductive oil detection sensor of magnetic nanomaterial has higher detection accuracy and lower detection limit. The detection accuracy of ferromagnetic particles of 20-70 μm improved by 20%-25%, while that of nonferromagnetic particles of 80-130 μm improved by 16%-25%. The method is based on microfluidic detection technology, and has the advantages of small volume and high detection precision. At the same time, it provides technical support for the rapid detection of hydraulic oil contaminants, which has great significance for fault diagnosis and life prediction of hydraulic systems.