Several new techniques for processing signals from dual‐wavelength/split‐beam spectrophotometers are discussed and contrasted with earlier methods. Based on these techniques, a signal‐processing instrument has been built which achieves significant improvements in speed, range, accuracy, and noise reduction. Since this instrument does not use dynode feedback, any light detector (photodiode or photomultiplier) can be used. Additionally, the instrument can be interfaced to virtually all spectrophotometers by simply connecting it to the detector output and a signal of the same frequency as the light chopper. Older spectrophotometers can, therefore, be upgraded easily. At the heart of this instrument is a new type of phase sensitive detector (PSD) which can demodulate the detector output (which has been modulated by the light chopper) in such a way as to provide two simultaneous signal outputs: one corresponds to the ’’reference’’ beam or sample, while the other is the ’’measure’’ beam/sample. Any function of these two signals (e.g., difference, ratio, or log ratio) can easily be computed directly. Because the PSD is gated in such a way as to ignore switching transients from the light chopper, these transients do not appear as an error in the demodulated output. The full theoretical signal bandwidth of one‐half the chopper frequency is available at the output since sample and hold amplifiers are used instead of low pass filters. Not only is speed improved, but chopper ripple in the output is reduced considerably.