A software defined radio detects an amplitude modulated (AM) signal contained within a received signal. This detection involves first receiving a radio frequency (RF) signal that contains the AM signal modulated about a carrier frequency (f.sub.c). The RF signal is downconverted using a first local oscillator having a frequency f.sub.lo. An in-phase (I) channel signal and a quadrature (Q) channel signal are produced. From the I-channel signal, a relationship between the carrier frequency and the frequency of the local oscillator is determined with a frequency detector. The downconverted carrier signal of the I-channel signal is used to create a second set of signals with proper phases and frequencies that can be used to rotate the I-channel and Q-channel signals to account for differences between the downconverted f.sub.c and DC. From the I-channel and Q-channel signals, a phase difference between the I-channel and Q-channel signals is determined so that the processed I-channel and Q-channel signals can be properly combined. Properly combining the processed (rotated) I-channel and Q-channel signals results in a demodulated AM signal.