In this research, the development of a diesel engine thermal overload monitoring system is presented with applications and test results. The designed diesel engine thermal overload monitoring system consists of two set of sensors, i.e., a lambda sensor to measure the oxygen concentration and a fast response thermocouple to measure the temperature of the gas leaving the cylinder. A medium speed Ruston diesel engine is instrumented to measure the required engine process parameters, measurements are taken at constant load and variable fuel delivery i.e., normal and excessive injection. It is indicated that with excessive injection, the test engine is of high risk to be operated at thermal overload condition. Further tests were carried out on a Sulzer 7RTA84T engine to explore the influence of engine operating at thermal overload condition on exhaust gas temperature and oxygen concentration in the blow down gas. It is established that a lower oxygen concentration in the blow down gas corresponds to a higher exhaust gas temperature. The piston crown wear rate will then be much higher due to the high rate of heat transfer from a voluminous flame.