An API oil–water separator is a device designed to separate gross amounts of oil and suspended solids from industrial wastewater produced at oil refineries, petrochemical plants, chemical plants, natural gas processing plants and other industrial oily water sources. The API separator is a gravity separation device designed by using Stokes Law to define the rise velocity of oil droplets based on their density and size. The design is based on the specific gravity difference between the oil and the wastewater because that difference is much smaller than the specific gravity difference between the suspended solids and water. The suspended solids settles to the bottom of the separator as a sediment layer, the oil rises to top of the separator and the cleansed wastewater is the middle layer between the oil layer and the solids.

The name is derived from the fact that such separators are designed according to standards published by the American Petroleum Institute (API).