A novel and noninvasive method of estimation of oxygen saturation in arterial blood (SpO2), employing the popular photoelectric plethysmographic (PPG) principle, is presented here. Based on a refined model for the attenuation of light in a PPG sensor, a simple method of computation of SpO2 that is not influenced by interfering parameters of a patient such as skin colour and quantum of intervening tissue between the source and the detector in a PPG sensor as well as sensor dependent parameters such as source intensity and detector sensitivity is identified. Preliminary results obtained on a prototype pulse oximeter, built and tested, demonstrate the practicality of the proposed method. © 2011 IEEE.