A dispersion interferometer is immune to mechanical vibrations, which is a great advantage for application to steady-state fusion reactors. This paper describes the performance of a phase-modulated dispersion interferometer with a new phase extraction method using a modulation amplitude ratio. On steady-state fusion reactors, reliable electron density measurement is required for fueling control. However, the signal-to-noise ratio (S/N) of conventional interferometers is affected by mechanical vibrations. In addition, fringe jump errors are possible at high densities. One possible approach to these problems is the use of a dispersion interferometer (DI) [1]. The DI is immune to mechanical vibrations, and hence does not need a vibration isolator. A two-color system is also not needed even if short-wavelength lasers (a CO 2 laser and a YAG laser, for example) are used. The fringe jump errors are attributed to 2π ambiguity in the phase shift. If short-wavelength laser light with a phase shift smaller than 2π is selected, the interferometer becomes free from fringe jump errors in principle. However, the S/N is significantly degraded because the phase shift due to vibrations (∝ 1/λ, λ: wavelength) increases and that due to a plasma (∝ λ) decreases for conventional interferometers. In contrast, the DI has no issue even if the plasma term is smaller than 2π owing to its immunity to vibrations. Thus, the DI becomes free from fringe jump errors if an appropriate wavelength is selected.Techniques that improve the resolution of DIs are currently being introduced [2][3][4][5]. This paper reports improved resolution and long-time stability in a DI that adopts phase modulation [2] with a photoelastic modulator (PEM) and a new signal processing method that uses a modulation amplitude ratio [4,5]. Figure 1 shows a schematic view of the present optical and electrical systems used for bench testing. The light source is a CO 2 laser with an output power and wavelength of 8 W and 10.6 µm, respectively. The focused laser light is injected into a nonlinear crystal of AgGaSe 2 to generate the frequency-doubled component (FD1). A mixed beam consisting of the fundamental and frequency-doubled components, whose polarizations are orthogonal, passes through a PEM with a drive frequency where c p = e 2 2ε 0 m e c, ω: angular frequency of the laser light, Δd: change of the optical path length due to vibrations, c: light speed, e: charge of the electron, ε 0 : dielectric constant, m e : mass of the electron, n e : line averaged electron density, L: path length in a plasma, and φ 1 , φ 2 : initial phase. The phase of the detected interference signal I is difference between phases above. Because the phase terms resulting from vibrations, 2ωΔd/c, are common, as shown