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A direct approach to the design of PM communications systems utilizing phase-locked demodulators is developed, and the design procedure is illustrated by example. In addition to the new design techniques, two other ideas are emphasized. First, the output signal-to-noise ratio (SNR) is defined as the ratio of the mean information power output to the total mean-square closed-loop phase error, which includes the effect of signal distortion on the design. Second, the safety margin is defined as the ratio of the total mean-square phase error diminished by the mean-square phase error due to signal distortion to the quantity representing the nominal or expected mean-square phase error due to additive noise. Although the design techniques developed in this paper are applicable for information waveforms having a flat power spectrum, a similar approach can be used for sine-wave modulation. The equations representing the output SNR for sine-wave modulation are included. An experimental PM communications system has been constructed, and the results of initial tests show good agreement with the predicted performance.