Registered depth and intensity data at a high frame rate, a compact design, low weight, and a reduced power consumption have motivated the increasing usage of lock-in time-of-flight (TOF) cameras in research areas such as computer graphics, machine vision, and robotics. The state-of-the-art practice is to use continuous wave modulation with square waves for TOF cameras. Square waves can be easily generated digitally with a high accuracy and stability using programmable logic devices. In this paper, a modulation method based on sine waves is proposed, which significantly reduces the depth distortion offset (wiggling effect) of lock-in TOF cameras. Furthermore, a model for the noise distribution in the depth image is derived. This model can predict the performance of the proposed modulation method for each pixel in real time.Index Terms-Optical distance measurement component, phase measurement, phase shift algorithm, photonic mixer devices (PMDs), time-of-flight (TOF).