A pulse oximeter measures oxygen saturation in the blood by using light to detect the ratio of oxygenated hemoglobin to deoxygenated hemoglobin. It shines red and infrared light through a finger and detects how much light is absorbed, since oxygenated and deoxygenated hemoglobin absorb different wavelengths differently. By measuring the ratio of absorbed red and infrared light, it can calculate the oxygen saturation percentage. Normal saturation is 97-99% and pulse oximeters are commonly used in medical settings like operating rooms, ICUs, and emergency departments to continuously monitor patients.