The laser interferometer has been used for measurement of the micro displacement error. Although the laser interferometer is widely accepted as a tool for measurement of motion accuracy, the set-up procedure is time-consuming because of the strict requirement on alignment between a laser head and optic units. This paper addresses the development of a laser interferometer to measure the micro displacement for a micro machine. The portable laser interferometer which integrates a laser probe and optics, is developed for the convenient measurement. For the experiment, moving mirror set up on the micro stage. The velocity decoding board is also added to calculate doppler shift frequency directly. The output signal is obtained and analyzed by LabView. Finally experiments are found out the relation between micro displacement and output signal.