A system and method for precisely measuring low-level linear and circular birefringence properties (retardance and direction) of optical materials (26). The system incorporates a photoelastic modulator (24) for modulating polarized light that is then directed through a sample (26). The beam ("Bi") propagating from the sample is separated into two parts, with one part ("B1") having a polarization direction different than the polarization direction of the other beam part ("B2"). These separate beam parts are then processed as distinct channels. Detection mechanisms (32, 50) associated with each channel detect the time varying light intensity corresponding to each of the two parts of the beam. This information is combined for calculating a precise measure of the linear and/or circular retardance induced by the sample, as well as the sample's fast axis orientation and direction of circular retardance.