A method for detecting and localizing a 
target tissue within the body in the presence of ambient light in which an 
optical contrast agent is administered and allowed to become functionally localized within a contrast-labeled 
target tissue to be diagnosed. A 
light source is optically coupled to a tissue region potentially containing the contrast-labeled 
target tissue. A gated 
light detector is optically coupled to the tissue region and arranged to detect light substantially enriched in 
target signal as compared to ambient light, where the 
target signal is light that has passed into the contrast-labeled tissue region and been modified by the contrast agent. A computer receives signals from the 
detector, and passes these signals to memory for accumulation and storage, and to then to 
image processing engine for determination of the localization and distribution of the contrast agent. The computer also provides an output 
signal based upon the localization and distribution of the contrast agent, allowing 
trace amounts of the target tissue to be detected, located, or imaged. A 
system for carrying out the method is also described.