We report the attainment of quantum-limited sensitivity in FM spectroscopy with a lead-salt diode laser. This sensitivity has been demonstrated at 4.8 μm in the detection of CO2 and CO. The improved sensitivity and reproducibility of our FM apparatus can be attributed to several new features. Recently obtained MBE-grown lasers have exhibited much better mode and filamentation characteristics and as a consequence much more reproducible measurements. Our technique of optical fringe filtering using frequency discrimination has effectively alleviated the chronic fringe problems associated with diode laser absorption absorption spectroscopy. Improved optical processing of our beam has allowed us to collect more of the laser output onto the detector with reduced feedback and multipassing effects. Finally, operation of the laser in the saturated regime of optical power vs. injection current essentially eliminates residual amplitude modulation (RAM) problems.