In previous attempts to find bulk modulus of liquids, the difficulty has always been in how to accurately measure minute volumetric changes in the fluids when pressure changes. The present paper describes the application of laser interferometry to this measurement in a mineral oil in order to develop a more reliable substitute for the conventional methods. Firstly, the basic relationship between density and refractive index of the oil was established by the use of the interference fringe method. Thereafter, the heterodyne interferometer was used to measure thermodynamic changes of state in the oil, giving adiabatic and isothermal compressibilities, specific heats at constant pressure and at constant volume, and specific heat ratio. The velocity of sound in the oil derived from adiabatic compressibility thus obtained agrees well with that determined experimentally through wave transmission tests. The same interferometer has also been shown to be applicable to the measurement of pulsating pressures in oil.