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Because of the proliferation of indoor wireless local area network (WLAN) communication systems, portable radio measurement devices are becoming quite advantageous. This paper reports on the development of an advanced portable and compact broadband WLAN IEEE 802.11b channel sounder, which directly exploits the physical layer characteristics of the WLAN system. The measurement system and experimental procedures have been presented with the measurement results. The channel sounder provides very good results compared to a vector network analyzer (VNA). Moreover, the measured and reconstructed cross-correlation functions from the estimated power taps are in excellent agreement with a root mean square error (RMSE) of 3%. Hence, this system has been developed to be used in conjunction with a WLAN modeling system to calibrate indoor empirical and deterministic models.