An on-chip dilution scheme for an electrowetting based microfluidic system is presented in this paper. The dilution scheme uses the mixing and splitting of two droplets of different concentrations to result in an intermediate concentration, as the fundamental operation. A range of dilution factors can be obtained repeating the simple two-droplet mixing and splitting cycles, in various combinations. The accuracy of the dilution scheme primarily depends on two factors - variation in droplet volume during dispensing and splitting, and homogenous mixing. The proposed on-chip dilution architecture was tested for the dilution factors of 2, 4 and 8, using a red food dye as the sample solution and 0.1M KCl solution as the buffer. The concentrations were measured using an optical absorbance measurement system, consisting of an LED and photodiode. The error in the dilution factor was found to be similar to15% for a dilution factor of 4 and similar to25% for a dilution factor of 8. Droplet volume variations in dispensing and splitting contribute to similar to80% of this error.