In order to study the settlement and horizontal displacement inside the dam, a precise micro displacement measurement device is designed. Among them, the laser spot displacement detection algorithm based on two-dimensional image processing is an important component of the device. In this paper, an anti distortion laser spot center detection algorithm is proposed, in which the image of the divergent part of the spot is derived by threshold segmentation of the original spot, which is denoised and smoothed through closed operations and Gaussian filtering. Then, edge detection is performed using the sobel operator to obtain a smoother edge contour. Finally, the anti-distortion laser spot center detection algorithm is processed to determine the spot center. At the same time, a series of laser spot images are collected through experimental equipment, and processed and compared with the traditional laser spot center detection algorithm and the anti-distortion laser spot center detection algorithm. The results show that the anti-distortion laser spot center detection algorithm has the highest accuracy and effectively eliminates the influence of the aberration of the remote spot on the spot center calculation.