In phase measuring deflectometry, two orthogonal sinusoidal fringe patterns are separately projected on the test surface and the distorted fringes reflected by the surface are recorded, each with a sequential phase shift. Then the two components of the local surface gradients are obtained by triangulation. It usually involves some complicated and time-consuming procedures (fringe projection in the orthogonal directions, accurate phase shifting).To avoid the complex process, a novel phase extraction algorithm with crossed fringes is presented in this paper. It is based on a least-squares iterative process. Both a numerical simulation and a preliminary experiment are conducted to verify the validity and performance of this algorithm. Experimental results obtained by our method are shown, and comparisons between our experimental results and those obtained by the traditional phase-shifting algorithm and between our experimental results and those measured by the Fizeau interferometer are made.