Most domestic fossil power plants have exceeded 100,000 hours of operation with the severe operating condition. Among the critical components of fossil power plant, high temperature steam pipe systems have had a many problems and damage from unstable displacement behavior because of frequent start up and shut down. In order to prevent the serious damage and failure of the critical pipe system in fossil power plants, 3-dimensional displacement measurement system was developed for the on-line monitoring. Displacement measurement system was developed with a use of a LVDT type sensor and two rotary encoder type sensors. This system was installed and operated on the real power plant successfully.