A digital envelope detector (consisting of both hardware and software) that provides accurate measurements of changes of peak values of an AC signal (these peak values constitute the envelope of a signal). Such accurate envelope measurements are required, e.g., to optimize the accuracy and selectivity of chemical sensors. The envelope values required for these sensors can not be obtained with common instruments (e.g. voltmeters) since these meters require that successive peaks be the same amplitude. Therefore, they can not measure the envelope of a gradually increasing or decreasing AC signal from the chemical sensors. The only possible alternative to this invention is high speed, high resolution analog-to-digital conversion (ADC) followed by extensive statistical analysis. The ADC method is much more expensive, slower, and excessively complicated compared to the invention. The invention works as follows: A signal of interest is compared to each of a set of accurately calibrated reference (or threshold) voltages provided by a digital to analog converter. A digital logic circuit and software respond each time the signal fails to exceed the current reference voltage. In that event, relevant data (e.g. time or cycle count) are digitally recorded and a new reference voltage is installed. The process is repeated until the desired range of change of the signal is measured. The result is a set of amplitudes as a function of time and/or cycle that fully and accurately describe the desired portion of a signal envelope.