An AM stereo demodulator with which the transition from the stereo receiving mode to the monaural receiving mode upon a reduction in the field strength of the received signal is made gradual so as to eliminate an abrupt change in the sound quality. For stereo demodulation, a pair of reference signals are generated which are .pi./2 different in phase for stereo reception. As the field strength of the received signal approaches the level where a phase-locked loop in the demodulator would become unlocked from the carrier of the received signal, the phase difference between the two reference signals is gradually reduced to .pi./4.