Characteristics of phase modulation of a nematic liquid crystal is studied. A new phase shifting shearing ESPI system which uses parallel aligned liquid crystal as a phase modulator is deceloped. This method lincreases the mearsuring accuracy of shearing ESPI by combining phase shifting technology with shearing ESPI. The phase modulation is simple. The correlation fringe method is used for phase calculation. Satisfactory results are acquired in the experiments on deformation measurement.