This paper describes a simple all-electronic noise cancellation scheme which allows wideband shot noise limited optical measurements at baseband with noisy lasers in many kinds of optical systems. With this system it is usually possible to achieve the performance of a complex heterodyne system with a much simpler homodyne approach. Although it is similar to earlier differential and ratiometric techniques its noise cancellation performance is much better and it is highly effective at modulation frequencies up to tens of megahertz. The basic idea is to subtract photocurrents directly under feedback control to cancel excess noise (i. e. noise above the shot noise level) and spurious modulation of the beam. A sample is split off from the beam at the laser and detected with a photodiode similar to the main detector at the system output. Most optical systems and detectors have very wide temporal bandwidths and excellent linearity thus at all frequencies of interest the sample photocurrent has exactly the same instantaneous fractional excess noise fluctuations as the laser beam itself with no differential gain or phase. If a fraction of the sample photocurrent is subtracted from the main detector output with feedback controlling the division ratio to keep the DC component of the result at zero the excess noise cancels identically. The actual noise cancellation bandwidth is very wide and does not depend on the feedback bandwidth only on that of© (1991) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.