An automated PC based free-space system for determining the permittivity of high-loss materials is proposed. The main feature of the system is to measure only the amplitudes of transmission and reflection coefficients using free-space method and determine the permittivity dynamically using a computer. Firstly, the expressions for the reflection and transmission coefficients involving the permittivity of the high-loss material are derived. Then these equations are solved together by using the halving method. In order to measure the amplitudes of reflection and transmission coefficients, a simple and inexpensive microwave measurement system is established. The parallel port is used as an interface between the computer and the designed control circuit. A software program is developed for the treatment of the measured signal amplitudes and determination the permittivity of high-loss materials.