There is a pressing need for a noninvasive device that can measure arterial and venous blood oxygen saturation to assess tissue oxygenation. No existing device can noninvasively measure the difference in oxygen saturation and flow rate of venous and arterial blood for early detection of diabetic microangiopathy; evaluating tissue oxygen supply would also allow detection and monitoring of vascular diseases. To overcome the major drawbacks of current techniques for evaluating cutaneous microcirculation, and to accurately evaluate actual skin oxygenation in patients with diabetes mellitus, Physical Optics Corporation (POC) proposes to develop a novel Micro-HemoDynamic Oximeter (MHDO) to measure oxygen saturation in both venous and arterial blood and blood flow, based on a combination of reflectance oximetry and laser Doppler flowmetry (LDF). The instrument will modulate light illumination to measure hemoglobin oxygen saturations at multiple depths of penetration into the skin. In Phase I, POC will test the prototype MHDO on a skin phantom and demonstrate its performance on an animal model. After evaluating the test results, POC will optimize the MHDO design in preparation for developing a Phase II working prototype for clinical trials on patients who might have diabetic microangiopathy.