This paper presents a novel test setup, based on a vector signal generator (VSG) and a vector signal analyzer (VSA), capable of nonlinear characterization of communications devices such as RF power amplifiers. Envelope time-domain waveform extraction and correction is applied to the DUT reference plane, preserving vector correction even in modulated environments where ingoing and outgoing signals from the ports of the DUT can be distinguished. This tool is valuable in the analysis of nonlinear devices, the generation of behavioral models and the study of memory effects. ©2008 IEEE.