Monitoring of subgrade settlement in railway and highway helps to maintain traffic safety and reduce infrastructure losses. When an excess subgrade settlement is detected, maintenances of the unqualified subgrade will be processed in time, and early warning of constructions will be processed to prevent the occurrence of safety accident. In this article, a noncontact, real-time, and unattended system based on optical method is introduced to monitor the subgrade settlement remotely. Several high-power infrared LED targets are mounted on the subgrade and they will move as the subgrade subsides. The movements of the LED targets are detected by an optical detection device based on the principle of optical imaging. The displacement data is remotely transmitted to a server for analysis via GPRS. The remote monitoring system has been applied to the monitoring of subgrade settlement of Zhensheng highway in Guizhou province of China in 2014. This technology helped to detect the subgrade settlement that was caused by the construction of Beiyinpo railway tunnel. Four test points on road surface were monitored at a sampling rate every 20 minutes. The effectiveness of the system has been verified by the practical application.