Magnetic fields are sensed by means of the Faraday effect. Corresponding electrical signals in phase quadrature are generated. An auxiliary oscillator is used to obtain a phase modulation proportional to the magnetic field to be measured. Demodulation is performed by a phasemeter described in detail. This phasemeter keeps track of multiples of 2&pgr; by digital accumulation and performs linear analog interpolation with an accuracy of 2&pgr;/1000. The hybrid digital/analog output has an arbitrarily wide measuring range. In addition, a purely analog output is provided combining the count of increments of 2&pgr; with the interpolation. The sampling rate of 40 kHz insures fast measurement response. Results of an experimental magnetic field sensing system incorporating the phasemeter as demodulation unit are presented.