This paper presents a new methodology to accurately evaluate the total harmonic distortion (THD) behavior of modern integrated circuits. The methodology is general, technology independent and is used to determine large-signal or reactive THD of signal processing circuits operating in the voltage or the current domain. It is based on Fourier series analysis and Parseval's theorem, where numerical integration may be needed to accurately compute THD. For low-frequency THD, the numerical integration can be simplified to a small number of summation without degrading the accuracy. The new methodology is incorporated in a computer-aided environment which accurately estimates THD, and the speed of calculation for many circuit is several orders of magnitude faster than SPICE or other commercial CAD tools. In addition, optimization of transistor sizes to reduce THD can be achieved by incorporating the methodology in an object-oriented CAD tool such as APLAC.