This article reports on the high‐resolution performance of the grazing‐incidence plane grating monochromator SX700/II, installed at BESSY by the Freie Universita¨t Berlin, in the photon energy range from about 40 to 900 eV. The high resolving power up to 10 000 achieved with this monochromator is based on improving the figure error of the ellipsoidal focusing mirror, on reducing the vertical dimension of the beam source, and on employing a 5‐&mgr;m exit slit. We report on high‐resolution gas‐phase studies in the double‐excitation region of He, as well as at core‐excitation thresholds of Ne, Ar, Kr, and Xe in the photon‐energy range from &bartil;45 eV to &bartil;900 eV. In addition, high‐resolution core‐excitation spectra at theKthresholds of C, N, and O are presented for gas‐phase CO, N2, and O2. In all cases, high‐nRydberg states and/or vibrational sidebands of the electronic excitations were resolved. The various contributions to the present instrumental linewidths are discussed as well as the prospects for further improvements in resolution with this monochromator.