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Phasor measurement unit (PMU) has the ability to identify and track the phasor values of voltage and current synchronously on a power system in real time, which is crucial to the detection of disturbances and characterization of transient swings. This paper provides an introduction to the framework of a new-type PMU, including the hardware architecture and the software structure. Then, an improved phasor computation algorithm is proposed to correct the errors occurred by the recursive DFT in the presence of frequency offset. Digital simulations and lab tests were accomplished with the new phasor-tracking algorithm. Results validated the performance of the improved phasor-tracking algorithm and its advantages over the traditional DFT algorithm.