This paper demonstrates the design of a Pulse Oximeter using 8 bit Atmel Microcontroller .The Oxygen Saturation of blood (SpO2) and Pulse Rate are the two important parameters for monitoring patientrsquos health condition. The method that has been used to measure pulse rate is widely known as photo-plethysmo-graphy (PPG). The Pulse Oximeter is one of the medical device used to measure SpO2 and pulse rate of a person and its readings is analyzed using developed algorithm. The proposed system consists of Finger tip sensor, Analog device, 8 bit Atmel Microcontroller circuit and display unit (PC). The oxygen saturation of blood can be calculated by measuring different intensities of red and infrared lights operating at different wavelengths of 660nm and 940nm. The pulse rate can be calculated by measuring the peaks of IR signal between the elapsed time. All these parameters are measured and then transferred to PC via Bluetooth for displaying the results. Practically, any body part can be used to measure pulse rate through the sensor, although fingertips and earlobes are commonly targeted.