In order to know the variation of rail gauge in real time, a real-time on-line gauge monitoring system was developed. Position sensitive detector and laser emitter was used as measuring elements for real-time acquisition of gauge change information. Mathematical model was established to calculate the offset of the gauge. The offset of two rails after moving was calculated by the combination algorithm. The position sensitive detector was compensated by quadratic interpolation algorithm to improve the accuracy and accuracy of position sensitive detector. The gauge change information in certain area was sent to the monitoring center for display by using controller area network bus and general packet radio service communication technology. The same simulation track was measured by the existing two-stage gauge gauge. The results show that, measurement accuracy of the system is 0.32mm. It meets the precision requirement of 1mm stipulated by track inspection industry at present.