This paper presents a digital directional coupler (DDC) that separates forward- and backward-traveling waves on a transmission line. Based on two independent wideband measurements of voltage and current and on frequency-domain digital wave splitting using a fast Fourier transform (FFT), the DDC is a versatile device for direction separation. A practical procedure is described for the calibration of the digital processor with respect to the particular transmission line and the voltage and current sensors that are being used. As an experiment, a DDC was designed and implemented using low-cost wideband sensors and was installed with medium-voltage equipment in a power distribution station. Partial discharge (PD) measurements were conducted on cross-linked polyethylene (XLPE)-insulated power cables to illustrate the directional separation capabilities of the DDC.