A technique is described which can be used to estimate magnetotelluric impedances using magnetic source fields having predetermined polarization characteristics. The technique involves digital filtering of the time-series data, followed by estimates of the amplitudes and phases of single cycles, utilizing a simple 'maximum/minimum' approach. The resulting impedance estimates are at least as consistent as estimates obtained using the more usual fast Fourier transform and bandwidth averaging technique. When magnetic source field amplitudes are subdivided into groups on the basis of their polarization directions, diagonal elements of the impedance tensors determined from individual groups show an upward bias. We interpret this as due to instability in solutions for the impedances which occurs when magnetic source fields are highly polarized. In addition, one of the tensor elements shows a consistent upward bias when the magnetic field is polarized predominantly in the east-west direction. Since we observe this latter effect at three separate sites, we suggest that it may be due to either a noise source which is polarized in the east-west direction, or to the assumption of vertical incidence not holding for horizontal magnetic source fields which are polarized in the east-west sense.