The diluent has influence on the intensity and nature of interaction among the constituents during solvent extraction. The physico‐chemical property of the phase where diluent is present required examination for optimizing the extraction conditions. The assessment of extraction efficiency is done on the basis of interaction between extractant and diluent. Densities, dielectric constants, and refractive indices have been measured for the binary mixture of octanoic acid/tri‐n‐butyl phosphate (TBP) with n‐hexane at T=303, 308 and 313 K over the whole constitution range. The dielectric constant, molar polarisation, refractive index and molar refraction values are maximum at 0.7674 mole fraction of octanoic acid and at 0.6577 of tri‐n‐butyl phosphate in binary mixture with n‐hexane. The values were used to further find out the molar polarization, molar refraction, correlation factor and excess Gibbs free energy. The excess values of the different properties were evaluated and fitted to the Redlich‐Kister polynomial equation. Negative values of ϵE were observed for octanoic acid and n‐hexane binary mixture at 308 and 313 K suggesting the dipoles were not aligned. For tri‐n‐butyl phosphate and n‐hexane binary mixture, positive ϵE values indicated the reduced number of aligned dipoles. The correlated motion of dipoles was explained by calculating the g values using Kirkwood‐Frohlich equation with the aid of dielectric and refractive index values of the pure solutes.