This paper proposes an approach for solving the optimal reactive power dispatch (RPD) problem for online application. The optimization algorithm uses measurements collected from phasor measurement units (PMUs) to estimate sensitivities, while least square estimation (LSE) algorithm is used to minimize total active power losses by maintaining voltages within limits. The proposed measurement-based approach can adapt to changes in system operating point and topology. Numerical results demonstrate that the proposed approach is comparable in performance and is much better in computation speed with other approaches based on power flow calculation, indicating that the approach is well-suited for realtime applications.