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An optical diagnostic method, grating light reflection spectroscopy (GLRS), has been demonstrated for the in situ monitoring of properties of heterogeneous matrices in industrial processes. The technique is based on measurements near the critical points of intensity and phase in waves reflected from a transmission diffraction grating in contact with a diagnostic sample. The features contained in the reflection spectrum near these thresholds allow for the simultaneous determination of the real and imaginary parts of the dielectric function of the sample. Using these data, the milling progress of highly concentrated fluid suspensions is observed as the material is milled from approximately 40 mm to 160 nm in diameter. A theoretical model that closely resembles experimentally determined spectra was constructed and applied in combination with principal components analysis (PCA) to demonstrate that GLRS can be used to closely monitor changes in the mean particle size of the nanomilled drug product.