In practical industrial applications, ambient temperature change is the main source of error in the angular accuracy of the rotating shaft in Portable Articulated Coordinate Measurement Instruments Machines (PACMM). To eliminate this error, this paper proposes a new method to establish a circular grating angle measurement error compensation model with ambient temperature influence factors. First, the harmonic method is used to establish the compensation model of angle measurement error of circular gratings at a specific temperature. Second, the polynomial method is used to establish the functional relationship between the harmonic coefficient and the ambient temperature. Finally, the experimental data at 14 ℃ is used as the verification data that are substituted into both the traditional harmonic error compensation model and the model proposed by this paper. The experimental results show that compared with the traditional harmonic error compensation model, the accuracy of the compensation model proposed by this paper is improved by a factor of approximately four, and the corrected residual peak value is within 2″; this value can effectively compensate the angular error of the circular grating at 10 to 40 ℃.