The Space Interferometer Mission (SIM) demands extremely precise and well-characterized laser metrology gauges (also called beam launchers) to monitor the internal and external optical delay quantities which are required for astrometric measurements. In general, any space-based sparse aperture system will require laser metrology gauges for high-bandwidth sensing of phasing errors. Lockheed Martin has aggressively pursued a technology development program for high-accuracy, space-qualified laser gauge systems. Part of this effort is focused on making compact, lightweight, low-power consumption, relatively inexpensive beam-launcher units using integrated-optics components. This paper will describe the design, laboratory implementation, performance, and error analysis for an integrated-optic based laser gauge that was constructed in FY 2000-2001 using commercially available heterodyne interferometer optics and electronics, combined with commercial fiber-optic cables and splitters. In order to provide for heterodyne mixing between the signals in the reference and measurement arms of the gauge, polarization-maintaining (PM) fiber components were used. The PM fiber lengths were matched to within 0.5 mm to avoid differential thermal effects in the measurement and reference arms. Steps were also taken to minimize the cyclic phase error due to polarization leakage, and the residual cyclic errors were measured. While not meeting the extreme picometer-level measurement accuracy requirements of SIM, the gauge can distinguish optical path differences to better than a 10 nm accuracy, which is sufficient for many space applications.