The first study of the photorefractive properties of doped CdTe has demonstrated high sensitivity for optical processing applications. Of the binary II‐VI and III‐V semiconductors, CdTe has the highest electro‐optic coefficientr41in the infrared, some three times larger than that of GaAs and InP. Deep levels introduced into CdTe exhibit appropriate absorption and photoconductivity at 1.06 &mgr;m by doping with V and Ti impurities. Photorefractive beam coupling experiments in CdTe:V gave small signal gains of 0.7 cm−1, and diffraction efficiencies with no applied electrical field of 0.7%. Thus, CdTe appears to be superior to previously studied III‐V semiconductors, in the near‐infrared spectrum. Optimization of doping and trap densities is expected to result in gain which exceeds the absorption loss, thereby allowing phase conjugation with infrared injection lasers.