Aiming at achieving quantitative detection of internal defect in materials, this work employs phase-shifting dualobservation digital shearography for determining embedding depth of internal defects in a nondestructive way. Firstly, a mechanical model of internal defect is established based on the principles of elastic mechanics. An analytical solution about embedding depth is hereby obtained. Then, dual-observation digital shearography is used for measuring the firstorder derivative of out-of-plane displacement at the region with defect. Consequently, the embedding depth of internal defect is determined by combining theoretical formula and experimental results obtained from shearogram. Finally, the measurement accuracy of embedding depth using proposed method is validated by comparison with another two commonly used methods. The measurement error of embedding depth is less than 5%, which completely confirms higher accuracy of the proposed method.