A magneto-optic polarimetry based on auto-balanced photodetection is investigated. In this experiment, a commercial auto-balanced photoreceiver is adopted to measure the Faraday rotation of air. With a proper setup to utilize its noise cancellation capability, the measurement can be flexible and sensitive. The angular sensitivity is 2.99x10(-8) rad Hz(-1/2), which is about 2.7 times the shot noise limit. The measured Verdet constant of air is +1.39x10(-9) rad G(-1) cm(-1) at 634.8 nm. Significantly we applied a small AC current to induce the magnetic field, so there was no heating in the coil. In addition, a double current modulation scheme was used to demonstrate that there was no zero drift and amplifier instability in the measurement. The possibility of improvement of the angular sensitivity and the potential applications are also discussed. (C) 2011 American Institute of Physics. [doi:10.1063/1.3602927]