We report an experimental quantum key distribution that utilizes balanced homodyne detection, instead of photon counting, to detect weak pulses of coherent light. Although our scheme inherently has a finite error rate, it allows high-efficiency detection and quantum state measurement of the transmitted light using only conventional devices at room temperature. When the average photon number was 0.1, an error rate of 0.08 and "effective" quantum efficiency of 0.76 were obtained.PACS numbers: 03.67. Dd, 42.50.Lc According to quantum mechanics, one cannot obtain information about a single quantum system without disturbing its state [1] nor can one clone an unknown state [2]. Quantum cryptography is a technique for realizing secure communications exploiting these principles. The most popular protocol is quantum key distribution (QKD) in which two non-orthogonal states (B92 protocol) [3] or four states (BB84 protocol) [4] are sent via a quantum channel in order to generate random keys owned only by the legitimate sender (usually called Alice) and the receiver (Bob). These keys are then used to encode messages.In practice, a faint laser pulse is usually used as the quantum system, and keys are encoded by its polarization or its phase. Ideally, a single photon is desirable, but it is very difficult to generate it experimentally. Most of the previous experimental and theoretical studies on QKD used or postulated photon counting as a means to detect weak light. However, the usage of photon counting gives rise to two limitations. One is a technical limitation that at present there exists no efficient photon counter for infrared light, especially for 1.55-µm where optical loss in an optical fiber is minimum. State-of-the-art experiments used a specially designed photon-counting system made up of cooled avalanche photo diode operated in a gated Geiger mode [5][6][7]. For example, a quantum efficiency of 7% for 1.55µm with a dark-count probability of 10 −4 per 2.6-nsec time-window was reported [8]. Another limitation is a more fundamental: the quantum state of the transmitted light cannot be directly measured; the state alternation is inferred only from the change of the error rate. For example, when the eavesdropper (usually called Eve) changes the photon number distribution of the transmitted light while keeping the polarization (or the phase) and the mean photon number, Bob cannot notice the presence of Eve. This feature allows Eve to perform many kinds of attacks and leads to security holes (one example is the photon number splitting attack [9]). * Electronic address: hirano@qo.phys.gakushuin.ac.jpIn this paper, we propose using balanced homodyne detection for implementing the BB84 protocol with phase coding [10]. As we will explain, the above limitations associated with photon counting can be resolved by using balanced homodyne detection. In order to demonstrate the experimental feasibility of our scheme, we have performed QKD by sending light pulses at 1.55-µm wavelength through an optical fiber of 20-cm length. Whe...

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