The heterodyne laser interferometer can achieve a sub-nanometer resolution on the basis of a stable subdivision of the light wavelength using phase measurement. However, due to inevitable imperfectness in optical system, a phase error occurs in the measurement signal and results in a nonlinear relation between the measured phase difference and the respective displacement. Based on the optical phase compensation theory, a significant approach is found to eliminate the nonlinearity of laser interferometer. This method can be used in most science researches and the industry precision nanometer measurement, and it is valid for nonlinearity errors whether it is a one-order or a two-order error.