In the last few years, attention has been paid to direct conversion receivers for engineering use.In direct conversion, a vector product of the received signal and the orthogonal oscillator output of the same frequency (orthogonal transformation) is used for direct conversion and demodulation to the baseband.As compared with current superheterodyne techniques, direct conversion has the following advantages: Resonant circuits for radio-frequency stages are not required. Integration will be possible in the future. Because of these reasons, direct conversion will play an important role in the development of compact and adjustment-free tuners.To demodulate analog modulated signals by direct conversion, highly accurate orthogonal transformation and signal processing sections are required. For this reason, practical application of direct conversion has been difficult.Our objective is to develop a direct conversion receiver for automotive use which enables AM and FM broadcast reception. We fabricated a prototype receiver with the following features: To ensure accurate signal processing for demodulation, we used digital signal processors (DSP). Signal compensation is performed at the baseband. In this paper, we would like to report on the demodulation method, signal compensation at the baseband, and briefly outline a prototype receiver with such sophisticated technologies.