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The performance of a dual-detector optical heterodyne receiver was analyzed and compared with the performance of a conventional single-detector heterodyne receiver. The dual-detector receiver is found to offer two main advantages over the single-detector receiver-1) increased performance in the presence of local oscillator intensity fluctuations that might severely degrade single-detector receiver performance, and 2) decreased local oscillator power requirements. These two advantages are particularly important in a communication system which uses semiconductor laser diodes as local oscillators. Such lasers suffer from intrinsic wide-band intensity fluctuations and can also impose strict power constraints on receiver design. Based on the analysis, suggestions for the optimal design of a dual-detector heterodyne receiver are made. Also, several experiments were performed to demonstrate the improved performance of the dual-detector receiver-both for unguided- and guided-wave receivers.