This thesis describes the development of a prototype passive, wireless sensor system based on magnetoelastic sensor technology. The application of the sensor system is aimed at the measurement of humidity levels in sealed containers and structures, in particular the detection of moisture ingress in building structures. The system uses magnetoelastic sensor elements as is commonly used in commercial electronic article surveillance (EAS) systems for the prevention of shoplifting. Magnetoelastic Metglas® 2826MB material is evaluated and it is shown that the application of a magnetic bias field of the appropriate magnitude is critical for optimum sensor performance. The sensors can be activated for the detection of water vapour by the application of an appropriate chemical interface layer. A polyvinyl alcohol (PVA) layer was found to produce a resonant frequency response of approximately 50 Hz/RH(%). The design and construction of a portable electronic sensor reader is described and it is shown that the reader can successfully interrogate the sensor inside sealed spaces at practical distances. The construction of a practical humidity sensor using a PVA coating and the humidity response of the sensor system is then calibrated using a commercial humidity sensor. The system showed good response over the 0-100 % relative humidity range, with some non-linearity observed at high humidity levels. The completed sensor system was then evaluated for practical applications including measurements inside a sealed food container as well as inside a wall cavity. The results indicated that the constructed system was capable of measuring humidity with reasonable accuracy in such applications