To meet the requirement of on-line detection of large gradient phases in machining, a single interferogram phase retrieval method based on the digital moiré phase shift algorithm and the Newton iteration algorithm is proposed herein. In the simulation, we compared the proposed method with three typical phase retrieval methods for single interferogram under different phases to be measured. The results show that the proposed method has high accuracy. We then experimentally measured the large gradient phase produced by a defocused sphere, and compared our result with the measurement result of mechanical phase shift in the interferometer produced by ZYGO corporation. The effectiveness of the proposed method is verified.