Various embodiments of an optical proximity sensor and corresponding circuits and methods for measuring small AC signal currents arising from the detection of pulsed AC light signals emitted by a light emitter and reflected from an object to detected in the presence of larger ambient light DC current signals are disclosed. Circuits and corresponding methods are described that improve the dynamic range, sensitivity and detection range of an optical proximity sensor by cancelling the contributions of DC current signals arising from ambient light signals that otherwise would dominate the detected small AC signal currents. The DC signal cancellation occurs in a differential amplifier circuit before small AC signal currents are provided to an analog-to-digital converter. The circuits and methods may be implemented using conventional CMOS design and manufacturing techniques and processes.