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π/4-DQPSK modem has been chosen as the modem scheme in many mobile communication systems. A new signal processing technique of π/4-DQPSK modem based on software radio is discussed in this paper. Unlike many other software radio solutions to the subject, we choose a universal digital radio baseband processor operating as the co-processor of DSP. Only the core algorithms for signal processing are implemented with DSP. Thus the computation burden on DSP is reduced significantly. Compared with the traditional ones, the technique mentioned in this paper is more promising and attractive. It is extremely compact and power-efficient, which is often required by a mobile communication system. The implementation of baseband signal processing for π/4-DQPSK modem on this platform is illustrated in detail. Special emphases are laid on the architecture of the system and the algorithms used in the baseband signal processing. Finally, some experimental results are presented and the performances of the signal processing and compensation algorithms are evaluated through computer simulations.