A new circuit for FM detection known as the ratio detector is coming into wide use. In this circuit two frequency- sensitive voltages are applied to diodes and the sum of the rectified voltages held constant. The difference voltage then constitutes the desired AM signal. This means of operation makes the output insensitive to amplitude variations. The basic principles governing the operation and design of the ratio detector are described. The ratio between the primary and secondary components of the frequency-sensitive voltages in a phase-shift type of ratio detector is a function of the instantaneous signal amplitude. The AM rejection properties, however, are shown to depend upon the mean ratio between these voltages. An expression which is developed for this ratio in terms of the circuit parameters provides the basis for arriving at an optimum design. The measurements necessary in the design of a ratio detector and in checking its performance are described.