A laser diode absorption spectrometer is coupled with a continuous dilution system for real-time monitoring of indigo dyeing of denim yarn. The reduced form of indigo in the dyebath is continuously pumped by a peristaltic pump into a mixing cuvette, where it is diluted by a factor of 80 with aerated water and oxidized into its stable form. This solution is then pumped into the sampling cell of the laser diode spectrometer for absorption measurements. Monochromatic radiation emitted from the laser diode at 635 nm is used to measure indigo absorption at the shoulder of a broad absorption peak. A linear calibration curve is obtained in a concentration range between 10 and 150 mg/L with a linear regression coefficient of r(2) = 0.9993, which corresponds to indigo concentrations in the dyebath covering the range between 0.8-12 g/L. This range exceeds indigo concentrations typically used in industry, which range between 1-3 g/L. The reproducibility of measurements is 0.5%. In this technique, there is no interference due to sulfur compounds present in the dyebath, which is a problem with electrochemical titration methods commonly used for indigo determinations.