Lateral diffusion error (LDE) is defined and the conventional methods of instrument configuration which minimize it are discussed. In 1999 it was discovered that the amount of light that laterally diffuses from an illuminated sample area to the adjacent unilluminated area is related to the spatial distribution of the light reflected by the illuminated area of the sample. A breadboard spectro-reflectometer which makes use of this relationship to correct for LDE has been built and test results are reported. Papers presented at the 2000 & 2001 TAGA meeting reported that printed colored areas adjacent to an unprinted area can affect the measured spectral reflectance value. This problem was attributed to bilateral diffusion of light between the area being measured and the adjacent printed colored area. The breadboard instrument was tested to determine if its capability to correct for LDE would result in correction of errors due to adjacent colors.