Ultra-precision displacement measurement system is one of the indispensable key subsystems of the lithography machine. The ultra-precision displacement measurement system based on laser heterodyne interference technology has the advantages of sub nano resolution, nano precision, meter range and measurement speed of several meters per second. It is so far the only displacement measurement system that can meet the requirements of the lithography machine. At present, there are two kinds of ultra-precision displacement measurement systems used in lithography: dual frequency laser interferometer and plane grating measurement system, both of which are based on laser heterodyne interference technology. In this paper, the principles, advantages and disadvantages of the two measurement systems and their typical applications in lithography are described.