We demonstrate the potential of in situ spectroscopic ellipsometry for the investigation of the chain segment density profile and layer thickness during the temperature-induced, reversible collapse-expansion transition of poly(N-isopropylacrylamide) (PNIPAM) grafted layers. Here, we study PNIPAM films with variable grafting densities in aqueous systems, which were produced by atom-transfer radical polymerization (ATRP). In our attempt to obtain a realistic quantitative description of the thickness of our swollen PNIPAM layers, various models were implemented to fit the ellipsometric data. As expected, we found that the swelling ratio is strongly dependent on the grafting density. From the ellipsometry results, the density and thickness variation accompanying the collapse transition across the lower critical solution temperature (LCST) was characterized. The collapse can be adequately explained by considering the PNIPAM film to consist of two layers: (i) a dense layer near the surface and (ii) a more diluted layer on the side of the film exposed to the solvent. Analysis of the optical response reveals a gradient density profile within these layers.