Successful operation of most ultrasonic ranging systems relies on accurate time of flight Tf measurements. Usually ultrasonic rangefinders for robotic applications employ a pulse- echo technique based on threshold detection to perform range measurements. The low-bandwidth ultrasonic transducers used for operation in air yield relatively long rise-time echoes; hence the range information obtained by threshold method is biased. Digital signal processing techniques using correlation methods can provide more accurate measurements. Correlation based detection methods provide better performance for their outstanding capability of detecting and recovering weak signals buried in noise. In this paper, we describe a pulse-echo ranging system whose receiver signal processing is completely digital; the proposed system employs a suitable digital signal processing technique (Hilbert transform) to extract the envelope of the reflected pulse echo together with a suitable pulse detection technique (threshold or correlation) for time of flight estimation. The experimental results obtained show the superior performance of the correlation technique compared with threshold technique especially at low signal to noise ratio.