  Every measurement of the population in an uncorrelated ensemble of two-level
systems is limited by what is known as the quantum projection noise limit.
Here, we present quantum projection noise limited performance of a Ramsey type
interferometer using freely propagating coherent atoms. The experimental setup
is based on an electro-optic modulator in an inherently stable Sagnac
interferometer, optically coupling the two interfering atomic states via a
two-photon Raman transition. Going beyond the quantum projection noise limit
requires the use of reduced quantum uncertainty (squeezed) states. The
experiment described demonstrates atom interferometry at the fundamental noise
level and allows the observation of possible squeezing effects in an atom
laser, potentially leading to improved sensitivity in atom interferometers.
