The differential heterodyne interferometer (DHI) is suitable for precise measurement of step height and line width, since its differential configuration can significantly reduce disturbances from the environment [1,2]. Like most phase measuring interferometers, however, the DHI is limited, in that it can obtain only the phase from 0 to 2π, because of the sinusoidal nature of the optical interference involved. Thus, the measurable step height is limited to one quarter of the wavelength of the light source. This study describes a confocal differential heterodyne interferometer (CDHI) for measuring step heights of several micrometers, with a high resolution and line width with high repeatability. The CDHI has a simple structure and rapid measurement speed.