The effective bulk modulus of working fluids plays an important role in the control of hydraulic actuation systems because of its effect on the system response time and performance. Therefore, to ensure good control, monitoring the effective bulk modulus of the working fluids is an important task. Current methods normally require precision test equipment consisting of many complex components. The size of these devices is large and thus makes online measurement impractical. In this research, we develop a new on-line technique to estimate effective bulk modulus of the working fluids based on measurements of the impedance of piezoelectric transducers. The idea is to generate a sensitivity curve characterizing the relationship between the effective bulk modulus and the impedance resonant frequency via either off-line numerical simulation or off-line experimental calibration; the curve can then be used for monitoring the working fluids bulk modulus in an online manner. In this article, a simulation model is utilized to predict the peak resonance frequency of the impedance function and identify its dependency on the variation of the fluid bulk modulus. The new approach is then illustrated and a sensitivity curve is generated through comparing the simulation results with experimental data.