[ecomodded]

They can be tested both in the car and out. If you have a high impedence volt meter, the procedure is fairly simple. It will help you to have some background on the way the sensor does it's job. Read how does an O2 sensor work first.

Testing O2 sensors that are installed

The engine must first be fully warm. If you have a defective thermostat, this test may not be possible due to a minimum temperature required for closed loop operation. Attach the positive lead of a high impedance DC voltmeter to the Oxygen sensor output wire.
This wire should remain attached to the computer. You will have to back probe the connection or use a jumper wire to get access.
The negative lead should be attached to a good clean ground on the engine block or accessory bracket. Cheap voltmeters will not give accurate results because they load down the circuit and absorb the voltage that they are attempting to measure.
A acceptable value is 1,000,000 ohms/volt or more on the DC voltage. Most (if not all) digital voltmeters meet this need. Few (if any) non-powered analog (needle style) voltmeters do. Check the specs for your meter to find out.
Set your meter to look for 1 volt DC. Many late model cars use a heated O2 sensor. These have either two or three wires instead of one.
Heated sensors will have 12 volts on one lead, ground on the other, and the sensor signal on the third.
If you have two or three wires, use a 15 or higher volt scale on the meter until you know which is the sensor output wire. When you turn the key on, do not start the engine. You should see a change in voltage on the meter in most late model cars.
If not, check your connections. Next, check your leads to make sure you won't wrap up any wires in the belts, etc. then start the engine. You should run the engine above 2000 rpm for two minutes to warm the O2 sensor and try to get into closed loop. Closed loop operation is indicated by the sensor showing several cross counts per second. It may help to rev the engine between idle and about 3000 rpm several times.
The computer recognizes the sensor as hot and active once there are several cross counts. You are looking for voltage to go above and below 0.45 volts. If you see less than 0.2 and more than 0.7 volts and the value changes rapidly, you are through, your sensor is good.
If not, is it steady high (> 0.45) near 0.45 or steady low (< 0.45).
If the voltage is near the middle, you may not be hot yet. Run the engine above 2000 rpm again. If the reading is steady low, add richness by partially closing the choke or adding some propane through the air intake. Be very careful if you work with any extra gasoline, you can easily be burned or have an explosion.
If the voltage now rises above 0.7 to 0.9, and you can change it at will by changing the extra fuel, the O2 sensor is usually good. If the voltage is steady high, create a vacuum leak. Try pulling the PCV valve out of it's hose and letting air enter. You can also use the power brake vacuum supply hose. If this drives the voltage to 0.2 to 0.3 or less and you can control it at will by opening and closing the vacuum leak, the sensor is usually good.
If you are not able to make a change either way, stop the engine, unhook the sensor wire from the computer harness, and reattach your voltmeter to the sensor output wire. Repeat the rich and lean steps.
If you can't get the sensor voltage to change, and you have a good sensor and ground connection, try heating it once more. Repeat the rich and lean steps. If still no voltage or fixed voltage, you have a bad sensor. If you are not getting a voltage and the car has been running rich lately, the sensor may be carbon fouled. It is sometimes possible to clean a sensor in the car.
Do this by unplugging the sensor harness, warming up the engine, and creating a lean condition at about 2000 rpm for 1 or 2 minutes. Create a big enough vacuum leak so that the engine begins to slow down. The extra heat will clean it off if possible. If not, it was dead anyway, no loss. In either case, fix the cause of the rich mixture and retest. If you don't, the new sensor will fail.