This paper reports a new multivariate method of background correction for hyphenated chromatography data such as diode array HPLC and diode array capillary electrophoresis (CE) measured under conditions of low signal‐to‐noise. The new method is able to correct linear and curved dynamically shifting baselines, a significant problem that limits the precision of CE assays. Its use is illustrated with nine simulated and 63 measured data sets. Serial dilutions were used to give measured data sets with a signal‐to‐noise ratio down to 10:1. The method's usefulness for routine operation was demonstrated by applying it to the above 72 data sets in an ‘automatic’ mode without any user interaction. In many cases these experiments showed improved precision and quantitative accuracy of peak areas after multivariate background correction. In most other cases the background correction method was neutral, i.e. it did not harm the peak area accuracy and precision where background offsets were absent or were too small to be reliably corrected. Compared with second‐order calibration methods such as the generalized rank annihilation method (GRAM) which can also correct for unknown background signals, the new method is insensitive to variation in peak shape and retention time from run to run, and prior knowledge in the form of standards is not needed. Copyright © 1999 John Wiley & Sons, Ltd.