A system has been developed and tested for optical noncontact measurement of displacement. The system consists of a light source, an objective lens, a quadrant pattern, and a quadrant photodiode. The principle is based on the detection of the contrast variation of the projected quadrant pattern as a function of defocus. This system has coaxial projection and observation axes and is hardly influenced by the color and inclination of the surface. The dynamic range ofthe measurement system is 150 μm with vertical resolution of 1 μm. Experimental tests verify the principle of the method and some tests of the system in applications are tried with expected results.