High-resolution photoelectric encoder usually achieves a high resolution by the subdivision of two-way orthogonal sine and cosine signals from a fine disk code. In order to improve the subdivision technology, this paper researches the subdivision errors specially. The signal DC component errors, magnitude errors, phase errors, harmonic errors, noise errors and quantization errors are analyzed, respectively. Based on properties of subdivision errors, the laws of errors and their computing formulae are obtained, then, the fairly complete mathematical results of subdivision errors and precision analysis for photoelectric encoders are formed. The results show that the subdivision precision is about 1.5% generally. It points out that it should pay more attention to the effects of subdivision errors on different technological steps such as code selection, axis design, signal extraction, circuit design and adjusting method, when the subdivision is used to improve the encoder accuracy. The research results are useful for analyzing and distributing errors, forecasting product accuracy and reducing design errors in the product design.