On the basis of existing techniques, a compact micro-displacement sensor of phase grating interference (PGI) is described, which adopts cylindrical hologram diffraction grating as the calibration standard. The optical principle of the sensor is explained, and the relation between the grating motion displacement and the phase shift of interference stripes is deduced. The improvement of the integral structure and the method of photoelectric signal processing are described in detail. With the software system based on the virtual instrument development platform Labwindows/CVI and other hardwares such as the precision displacement worktable, the surfaces of typical parts are measured and the characterization results are given. The sensor has wide measuring range and high resolution, its sensitivity and resolution being independent of the wavelength of the incident light. The vertical measuring range is 0-6 mm, and the vertical resolution is 0.005 μm. The experimental results show that the sensor can be used to measure and characterize the surface topography parameters of the plane and curved surface. On the basis of existing techniques, a compact micro-displacement sensor of phase grating interference (PGI) is described, which takes a cylindrical hologram diffraction grating as the calibration standard. The optical principle of the sensor is explained, and the relation between the grating motion The improvement of the integral structure and the method of photoelectric signal processing are described in detail. With the software system based on the virtual instrument development platform Labwindows / CVI and other hardwares such as the precision displacement worktable, the surfaces of typical parts are measured and the characterization results are given. The sensor has wide measuring range and high resolution, its sensitivity and resolution is independent of the wavelength of the incident light. The vertical measuring range is 0-6 mm , and the vertical resolution is 0.005 μm. The experimental results show that the sensor can be used to measure and characterize the surface topography parameters of the plane and curved surface.