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IMPATT diode characterization on the basis of output power and the corresponding FM noise figure over a range of operating conditions is presented. The characterization consists of families of power noise curves obtained for a phase-locked IMPATT oscillator where the supply current, load conductance, and the operating frequency are parameters. It is shown that the maximum output power and minimum FM noise are not achieved concurrently. In particular FM transmitter application, it is shown that the best performance for each type of diode was obtained when operated at less than maximum power (and at reduced efficiency) where the system benefits from the attending lower noise. Better system performance, this application, was obtained with the GaAs IMPATT diode. The power-noise characterization defines the optimum operating conditions for an IMPATT diode and provides a valid basis for the comparison of diodes for specific applications.