International Telemetering Conference Proceedings / October 25-28, 1999 / Riviera Hotel and Convention Center, Las Vegas, Nevada / In this paper, a new coherent correlation-loop architecture for tracking direct-sequence spread-spectrum signals is proposed. In the proposed correlation loop model, the mean-square tracking error is minimized by varying the cross-correlation function between the received signal and the locally generated signal. The locally generated signal is produced by passing a replica of the transmitted signal through a linear time-invariant filter, which is termed the VCC filter. The issue of bandwidth of a correlation loop is addressed and a bandwidth definition for comparative purposes is introduced. The filter characteristics to minimize the tracking errors are determined using numerical optimization algorithms. This work demonstrates that the amplitude response of the VCC filter is a function of the input signal-to-noise ratio (SNR). In particular, the optimum filter does not replicate a differentiator at finite signal-to-noise ratio as is sometimes assumed. The optimal filter characteristics and the knowledge of the input SNR can be combined to produce a device that has very low probability of loosing lock.