Optical coherence theory for the complex envelopes of passband fields has been concerned, almost exclusively, with correlations that are all phase insensitive, despite decades of theoretical and experimental work on the generation and applications of light with phase-sensitive correlations. This paper begins the process of remedying that deficiency, by developing coherence theory for classical scalar fields with phase-sensitive fluctuations. In particular, the Wolf equations are extended to phase-sensitive fields, paraxial free-space propagation effects are analyzed, and a normal-mode decomposition for scalar fields of arbitrary coherence is established. The extension of this theory to the field-operator description that is needed to characterize non-classical light beams is briefly discussed.© (2006) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.