Embodiments of an axle monitoring system of the present invention generally include an oil bath cap plug equipped with a sensor assembly containing one or more power provision components, and an oil level monitor, a humidity/temperature sensor, a vibrational energy detector, and/or a GPS tracking chip, all of which are mounted on a microcircuit board, wherein the sensor assembly is adapted and configured to be fitted inside the axle oil bath cap plug. In various embodiments, information and/or data obtained by the sensor assembly can be transmitted, in raw or processed form, to one or more remote devices. Embodiments of a method of using embodiments of an axle monitoring system of the present invention are also provided.