Values of blood oxygenation levels are useful for assessing heart and lung conditions, and are frequently monitored during routine patient care. Independent measurement of the oxygen saturation in capillary blood, which is significantly different from that of arterial blood, is important for diagnosing tissue hypoxia and for increasing the accuracy of existing techniques that measure arterial oxygen saturation. Here, we developed a simple, non-invasive technique for measuring the reflected spectra from individual capillary vessels within a human lip, allowing local measurement of the blood oxygen saturation. The optical setup includes a spatially incoherent broadband light that was focused onto a specific vessel below the lip surface. Backscattered light was imaged by a camera for identifying a target vessel and pointing the illumination beam to its cross section. Scattered light from the vessel was then collected by a single-mode fiber and analyzed by a fast spectrometer. Spectra acquired from small capillary vessels within a volunteer lip showed the characteristic oxyhemoglobin absorption bands in real time and with a high signal-to-noise ratio. Measuring capillary oxygen saturation using this technique would potentially be more accurate compared to existing pulse oximetry techniques due to its insensitivity to the patient’s skin color, pulse rate, motion, and medical condition. It could be used as a standalone endoscopic technique for measuring tissue hypoxia or in conjunction with conventional pulse oximetry for a more accurate measurement of oxygen transport in the body.