In many sensing systems, a highly coherent laser source is necessary to perform sensitive interferometric or coherent measurements. At TeraXion, we have built a compact laser system that provides a stable laser frequency with a very narrow linewidth using a 60 mW DFB semiconductor laser. The linewidth reduction system uses a frequency discriminator to measure the laser frequency noise and provides an electrical feedback to reduce this noise over a given bandwidth. Experimental work shows that the phase noise of the DFB semiconductor laser can be reduced by more than 4 orders of magnitude from 10 Hz to 100 kHz. We analyzed the effect of the particular frequency noise spectrum of such a laser on its degree of coherence, its linewidth and the resulting interferometric noise. The laser linewidth computed from the power spectral density of frequency noise of the laser is reduced from 570 kHz down to an equivalent of 1.8 kHz when the output signal is observed for 30 ms, and from 370 kHz to 18 Hz for 1 ms. Similarly, the coherence length is increased from 145 m up to 45 km for fringes observed over 30 ms. Each result is compared with those obtained with a fiber laser.© (2006) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.