In this system, a holographic lens was used as splitter. As the focus spot of the ±1 degree diffracted convergent (divergent) beams did not move with the linear movement of the incident beam under the Fresnel approximate conditions, the measurements of linear displacement and angle displacement were separated. Two PSD (Position Sensitive Detector) were used as detectors, and He-Ne laser beam was used as datum. Then four degree-of-freedom measurement of the target could be finished. The configuration design is reasonable. The volume of testing head is small. The weight is light, and it's convenient to be fixed. The measuring precision is high. The experiments prove that the stabilization of linear shift can reach 1 μm, and angle shift can reach 1″. The system can be used to collimate other devices with multi degree-of- freedom and measure the minute shifts, such as the guide rail of machine tool and the assembling of large parts and so on.