The recurrent difficulties of rapidly localizing a small object in a large volume of highly scattering material such as brain and breast has been the ‘‘stumbling block’’ of optical methods for tumor detection. Amplitude cancellation of in‐ and out‐of‐phase photon diffusion patterns, used in detection of small objects containing highly absorbing and fluorescing contrast agents provides real time, two‐ and three‐dimensional localization of objects of mg size and picamole contents in models of human breast and brain tumors with positional accuracies of millimeters. A simple robust electronic circuit is described and tested to give a phase accuracy of ∼0.1°. An electro‐optical scan rapidly detects small objects in a large volume that simulates the absorption/scattering characteristics of human head or breast. ©1996 American Institute of Physics.