This paper describes an improved differential photocurrent method of measurement of optical‐absorption coefficient &agr; and minority‐carrier diffusion lengthL. A prototype instrument can detect signals of the photocurrentIp, the differential photocurrent &Dgr;Ip, and the depletion‐layer widthWof sample diode, and plot automatically two linear relationships: log(&Dgr;Ip/ &Dgr;W) vsWandIpvs &Dgr;Ip/ &Dgr;W. From these plots, &agr; andLare readily obtained. Performance of the instrument is demonstrated using a Au–GaAs 0.62P0.38Schottky‐barrier photodiode.