A new technique has been found that uses in-phase and quadrature phase (I/Q) demodulation to optimize the images produced with an amplitude-modulated laser imaging system. An I/Q demodulator was used to collect the I/Q components of the received modulation envelope. It was discovered that by adjusting the local oscillator phase and the modulation frequency, the backscatter and target signals can be analyzed separately via the I/Q components. This new approach enhances image contrast beyond what was achieved with a previous design that processed only the composite magnitude information.