A method for monitoring oxygenation of blood includes the steps of transmitting light containing a plurality of wavelengths into blood and measuring a remitted spectrum over the plurality of-wavelengths. A measured blood absorption spectrum is then calculated from the remitted spectrum and local rates of change in the measured blood absorption spectrum are estimated at a plurality of the wavelengths, including at least one isobestic wavelength. An estimate of blood oxygen saturation (SO.sub.2) is calculated as a function of absolute values of the local rates of change of the measured blood absorption spectrum.