This contribution deals with guided radar distance measurements in the field of industrial tank level control. The aim is to achieve a submillimeter gauging accuracy even when conducting the measurement within a highly dispersive environment of large and thus overmoded circular waveguides. Normally, multimode propagation causes a decrease in measurement precision. Therefore, the effects of intermodal dispersion are fundamentally reviewed and, based on these results, a correlation-based signal processing method is presented. This method is able to exploit the otherwise parasitic dispersion effects to enhance the measurement precision even in constellation with a simple waveguide transition or antenna, respectively. Furthermore, considerations on the mode variety and its influence on the signal complexity as well as investigations on the technique's reliability and accuracy are presented. Measurement results in a frequency range of 8.5-10.5GHz are provided for three different kinds of waveguide transitions proving the capability of the method. © Cambridge University Press and the European Microwave Association 2010.