An improved method for measuring angular displacement is proposed based on an existent measurement technique. The choice of proper initial angle of incidence makes a lateral shearing interference easy to realize between the two beams reflected from the front and back surfaces of a plane-parallel plate. One-dimensional position sensitive detector is used to measure the offset of the light spot focused upon the photo sensitive surface of the detector by a lens. According to the interference signal′s phase and light spot′s offset, the angular displacement is measured. In this optical configuration, the use of a reflecting mirror increases the optical path difference in the plane-parallel plate, which improves the sensitivity of angular displacement measurement. Finally, the influence of the initial angle of incidence on the ratio of shear is analyzed and the measurement accuracy based on this method is discussed. The experimental results show the improved parallel plate interferometer can achieve a measurement repeatability of 10-8 rad order of magnitude.