The generation of pulsed squeezed light using an optical parametric oscillator (OPO) is discussed. This mode-locked optical parametric oscillator consists of a nonlinear crystal in a cavity which is resonant for both signal and idler waves and which is synchronously pumped by the second-harmonic of an acousto-optically mode-locked cw Nd: YAG laser. The fundamental wavelength of the pump laser provides local oscillator pulses for balanced homodyne detection of squeezed vacuum pulses emitted by the oscillator when operated below oscillation threshold. Photocurrent noise reduction to 30% below the classical shot-noise limit is observed, corresponding to squeezing of the field to a level approximately a factor of two below the mean square vacuum noise. © 1992 Springer-Verlag.