An optimal design method of parallel plate interferometer is proposed in order to increase the measurement accuracy of angular displacement. The main factors determining the measurement accuracy are respectively discussed based on the analyses of the measurement error of angular displacement. It is noted that the initial angle of incidence on the plane-parallel plate, the index of refraction of the plane-parallel plate and its thickness all have great influences on the measurement accuracy. The research results show that the angular displacement measurement can be realized with higher accuracy by choosing optimal initial angle and component parameters as well as using of a reflecting mirror to amplify the optical path difference.