System and method for improving a digital PLL's performance by making fine grained adjustments to the loop gain. A preferred embodiment comprises a plurality of loop gain adjustors (such as loop gain adjustors 605, 606, 607, and 608) that can incrementally adjust the loop gain. The incrementally adjusted loop gains are sequentially brought on-line so that the loop gain of the digital PLL is slowly decreased. By slowly decreasing the loop gain, the digital PLL is less perturbed by smaller noise transients that would take time to settle. Hence, the digital PLL can quickly acquire a signal and then decrease its loop gain and hence its bandwidth when it only needs to track a signal. The reduced bandwidth also reduces the overall noise in the digital PLL that is due to the reference noise contribution.