The photoelectric rotary and angle encoder is a digital angle measuring device, which is integrated with optics, mechanics and electrics. Because of its simple structure, high resolution, and high accuracy, it has been widely used in precision measurement of angle, digital control and digital display system. With the needs of fast tracking and accurate orientation on the horizon and air targets, putting forward higher requirements on accuracy of angle measurement and resolution of photoelectric rotary and angle encoder. Influences of manufacturing, electronics segmentation, optical and mechanical structure and eccentric shaft to photoelectric encoder precision and reducing methods are introduced. Focusing on the eccentricity error, building up an error correction model to improve the resolution of angle encoder and the model was verified by test.