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This paper presents a baseband noise reduction method in the receiver for UHF RFID readers. The signal captured from the transmitter after passing through the main delay components is fed as an LO signal into the down-converter in the receiver. At the down-converter, the LO signal and the leakage signal from the transmitter to the receiver are mixed with each other. The matching of the delay between the two correlated signals virtually eleminates the additional baseband noise included in the phase noises after their mixing. Lowering the baseband noise improves the sensitivity of the receiver, thus allowing the RFID tags to be read further away from the reader. The proposed method was applied to a portable UHF RFID reader for its validation. Compared to the conventional configuration, the simulated baseband noise level of more than 26 dB was reduced by the proposed method. The measured sensitivity of about 19 dB was also improved. As a result, the reading distance was extended by 1.9 m from 2.02 to 3.92 m.