This article presents a high-performance frequency-domain chipless RFID reader with vector background subtraction capabilities, implemented in a software-defined radio (SDR) for the first time. The proposed reader is low-cost, compact size, and versatile. It is implemented in a USRP N210 paired to a modified CBX-40 daughterboard, enabling magnitude and phase data acquisition in a monostatic (one antenna) set up. The reader can perform a vector background subtraction operation between two complex measurements (with and without a chipless tag) to suppress the self-interference (SI) that hinders the response of the tag and provide 40 dB of dynamic range. To demonstrate the performance of the reader, the spectral signatures of three frequency-coded (FC) tags with four resonant frequencies are captured over the 1.5–4-GHz band scanned with 10-MHz resolution in 251 ms, obtaining comparable measurements to those of an expensive laboratory vector network analyzer (VNA) from 20 to 40 cm. The detected resonant frequency offset between both devices is $\Delta f_{r} \leq 4.18\%$ . It is also demonstrated that the proposed reader can track a resonant frequency shift and therefore be used in real-time sensing applications.