A long-established distance sensing technique is based on measurement of the modulation phase shift of an intensity-modulated laser beam that is reflected from a remote target. This technique is capable of distance measuring precision in the order of several microns in conjunction with a co-operative target and modulation frequencies up to 1GHz, but generally suffers from severe performance degradation on natural surfaces due to the signal-to-noise ratio limitations of available fast optical detectors. In a novel variant of the intensity-modulated phase shift technique, the measuring beam reflected back off the target is modulated a second time at a slightly different frequency to achieve modulation frequency translation in the optical domain prior to optical detection. The resulting component of optical modulation at the difference frequency preserves the phase shift carried on the high frequency measuring beam, permitting the use of a sensitive, low-bandwidth optical detector to measure the critical phase shift. Following a review of the measuring principle, its practical implementation and current stage of development, examples are provided of the measurement performance achievable in various applications.