In a method of analyzing an optical communications signal, a threshold is established under control of a processor, and a decision circuit compares the amplitude of the signal to the threshold. A counter samples the output of the decision circuit and counts, over many periods of the signal, those samples indicating that the amplitude of the signal is above the threshold. The threshold generating, comparing, and counting are repeated for several thresholds within a range corresponding to an expected amplitude range of the signal. The stored counts and thresholds represent an amplitude histogram N(V.sub.T) for the signal. The derivative dN/dV.sub.T of the function N(V.sub.T) represents the probability density function (PDF) for the signal amplitude and can be used to derive performance information such as bit error rate and optical signal-to-noise ratio (OSNR).