The invention discloses a grating displacement measuring method for long-stroke and high-precision measurement. The grating displacement measuring method for long-stroke and high-precision measurement comprises the following steps: emitting an orthogonally-polarized dual-frequency laser by a dual-frequency laser, splitting the orthogonally-polarized dual-frequency laser into two light beams by a beam splitting prism and a 90-degree turning mirror, enabling the two light beams to irradiate into two polarizing light splitting prisms respectively, and splitting the two light beams into P light and S light by the two polarizing light splitting prisms; after the P light and S light pass through four quarter-wave plates, enabling the P light and S light to become right-handed circularly polarized light and left-handed circularly polarized light; after the right-handed circularly polarized light and the left-handed circularly polarized light are reflected by two planar reflectors respectively, enabling the right-handed circularly polarized light and the left-handed circularly polarized light to irradiate onto a measuring grating by a Littrow angle; and moving the measuring grating, returning diffractive light with displacement information according to an original path, enabling the diffractive light to become the S light and the P light after passing through the quarter-wave plates respectively, transmitting the S light and the P light through the two polarizing light splitting prisms, superposing the S light and the P light on the emergent surfaces of the two polarizing light splitting prisms, and receiving the light by two receivers. By the grating displacement measuring method, precision displacement measurement can be achieved, a reading head is compact in structure and small in size, the sensitivity of a system to the environment is low, and the cost for controlling a measuring environment is greatly reduced.