A new method for pulse oximetry is presented that possesses an inherent insensitivity to corruption by motion artifact, a primary limitation in the practical accuracy and clinical applicability of current technology. Artifact corruption of the underlying photoplethysmographic signals is reduced in real time, using an electronic processing methodology that is based upon inversion of a physical artifact model. This fundamental approach has the potential to provide uninterrupted output and superior accuracy under conditions of sustained subject motion, therefore, widening the clinical scope of this useful measurement. A new calibration technique for oxygen saturation is developed for use with these processed signals, which is shown to be a generalization of the classical interpretation. The detailed theoretical and practical issues of implementation are then explored, highlighting important engineering simplifications implicit in this new approach. A quantitative investigation of the degree of insensitivity to artifact is also undertaken, with the aid of a custom electronic system and commercial pulse oximeter probes, which is compared and contrasted with the performance of a conventional implementation. It is demonstrated that this new methodology results in a reduced sensitivity to common classes of motion artifact, while retaining the generality to be combined with conventional signal processing techniques.