We investigate the potential for sensitively detecting millimeter-wave absorption through multiphoton ionization using the lowest rotational transition in CO (X-1 Sigma, J = 1 <- J = 0) at 115 GHz as a diagnostic tool. This transition represents an almost perfect realization of a quantum mechanical two-level system. In the experiment, the output of a powerful continuous millimeter-wave source with sub-kilohertz resolution propagates counter to a pulsed molecular beam, causing Doppler shifted resonances. Absorption is detected by monitoring the involved rotational levels through resonance enhanced multiphoton ionization (REMPI). Observed polarization, saturation and Doppler effects demonstrate that the interaction with the millimeter-wave field is coherent and can be simulated well using the results for the two-level system. The combination of these results indicates that the millimeter-wave field is approximated well by a Gaussian beam with beam waist around 15 mm and constant effective electric field amplitude on the molecular beam axis. Time-correlated frequency modulation in the form of a short rectangular pulse is used to follow the molecular trajectory from the source to the laser interaction region. The experiments clearly demonstrate a great potential of extending high-resolution molecular beam spectroscopy with mass specific REMPI detection into the sub-terahertz or terahertz regimes.