Sensing capabilities of radio frequency identification (RFID) have recently been investigated both theoretically and experimentally. Frequency-modulated sensors utilize the modulation frequency for carrying sensor information when interrogated by a reader device. This paper derives analytical expressions for optimizing the electrical circuitry of such a sensor, as well as a figure of merit for selecting a suitable diode for rectification. A novel design strategy for optimizing an RFID sensor based on frequency modulation is presented, and it is used to design, fabricate, and experimentally characterize an optimized sensor. The result of this paper shows that a change in the sensor capacitance can be detected across a distance of 15 m with low uncertainty.