A high-sensitivity signal-to-noise ratio (SNR) determining apparatus measures the in-band SNR of an optical data signal by detecting and demodulating the optical signal and analyzing a narrow bandwidth of the resulting electrical data spectrum at half the data clock frequency, or more generally, a predetermined frequency equal to a multiple M of one-half the clock frequency, f.sub.clk/2, where M is an integer equal to or greater than one, may be used. When the optical signal is a WDM signal, a tunable filter isolates a single channel for detection. The detected electrical signal is subjected to both an in-phase and quadrature narrowband RF demodulation using a local oscillator at precisely half the clock frequency. Using this technique, the magnitude of the data portion of the optical signal becomes the in-phase component and the magnitude of the noise present in the optical signal becomes the quadrature component. The ratio of the two demodulated signal components (in-phase and quadrature) is proportional to the SNR of the detected signal. The technique is inherently narrowband and offers very high sensitivity and does not require an optical pre-amplifier.