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The interferometers now being developed to detect gravitational waves work by measuring the relative positions of widely separated masses. Two fundamental sources of quantum-mechanical noise determine the sensitivity of such an interferometer:(i) fluctuations in number of output photons (photon-counting error) and (ii) fluctuations in radiation pressure on the masses (radiation-pressure error). Because of the low power of available continuous-wave lasers, the sensitivity of currently planned interferometers will be limited by photon-counting error. This paper presents an analysis of the two types of quantum-mechanical noise, and it proposes a new technique—the" squeezed-state" technique—that allows one to decrease the photon-counting error while increasing the radiation-pressure error, or vice versa. The key requirement of the squeezed-state technique is that the state of the light entering the interferometer …