We present the development and the first application of an optical sensor system that allows single-cycle determination of methane (CH4) concentration inside internal combustion (IC) engines. We use non-dispersive infrared absorption spectroscopy to detect the CH4 density with a time resolution up to 33 μs at acquisition rates of 30 kHz. The measurement scheme takes advantage of the strong temperature dependence of the absorption band applying two detection channels for CH4 that detect different spectral regions of the ν3 anti-symmetric C-H-stretch absorption. The strategy allows the simultaneous determination of fuel concentration as well as gas temperature. We show the proof-of-concept by validation of the measurement strategy in static pressure cell experiments as well as its application to a methane-fueled IC engine using a modified spark plug probe. Our results clearly demonstrate that it is crucial to determine the CH4 temperature in the probe volume. Due to thermal influences of the sensor probe, the temperature needed to calculate the desired quantities (fuel density, fuel concentration) significantly differs from the gas phase temperature in the rest of the combustion chamber and estimations from standard thermodynamic models, e.g., polytropic compression, will fail.