Measuring the level of liquid or solid is an important process in a container in various process industries. This paper presents the design of a capacitance transducer using a 555 timer circuit measuring the capacitance in terms of frequency and interfaced to a microcontroller to provide an accurate level measurement system. The whole system was tested and calibrated with a standard graduated tank (5-95%). The loading and unloading error percentages and the hysteresis error are determined and the maximum range to which the variation corresponds to is observed. The measurement quality of the system was further improved by linearization and the results are analyzed.