Angular differential imaging is a high-contrast imaging technique that reduces quasistatic speckle noise and facilitates the detection of nearby companions. A sequence of images is acquired with an altitude/azimuth telescope while the instrument field derotator is switched off. This keeps the instrument and telescope optics aligned and allows the field of view to rotate with respect to the instrument. For each image, a reference point-spread function (PSF) is constructed from other appropriately selected images of the same sequence and subtracted to remove quasistatic PSF structure. All residual images are then rotated to align the field and are combined. Observed performances are reported for Gemini North data. It is shown that quasistatic PSF noise can be reduced by a factor ~5 for each image subtraction. The combination of all residuals then provides an additional gain of the order of the square root of the total number of acquired images. A total speckle noise attenuation of 20-50 is obtained for a 1 hr long observing sequence compared to a single 30 s exposure. A PSF noise attenuation of 100 was achieved for a 2 hr long sequence of images of Vega, reaching a 5 σ contrast of 20 mag for separations greater than 8''. For a 30 minute long sequence, ADI achieves signal-to-noise ratios 30 times better than a classical observation technique. The ADI technique can be used with currently available instruments to search for ~1M_Jup exoplanets with orbits of radii between 50 and 300 AU around nearby young stars. The possibility of combining the technique with other high-contrast imaging methods is briefly discussed.