The development of lasers, new electro-optic light modulation methods, and improved electronic techniques have made possible significant improvements in the range and accuracy of optical distance measurements, thus providing not only improved ranging methods but also useful techniques for the study of other geo-physical, meteorological, and astronomical problems. One of the main limitations, at present, to the accuracy of distance measurements is the uncertainty in the average propagation velocity of the radiation resulting from inhomogeneity of the atmosphere. Accuracies as high as a few parts in ten million now appear feasible, however, through the use of the dispersion method, in which simultaneous measurements of optical path length at two widely separated wavelengths are used to determine the average refractive index over the path and hence the true geometrical distance. The design of a new instrument based on this method, which utilizes wavelengths of 63281 and 3681X and 3-GHz polarization modulation of the light, is presented. Preliminary measurements over a 5.3-km path with this instrument haXe demonstrated a sensitivity of 3 x 107 in detecting changes in optical path length for either wavelength using 1-sec averageing, and a standard deviation of 3 x 10-7 in corrected length. The principal remaining sources of error are summarized.