Abstract A system for accurate real-time measurement of deflections was developed. A stable laser source is, by means of a single-mode fiber, coupled to an optical head located at one end of deformed structure. A detector circuit with a quadrant detector and processing electronics, located at the other end of the structure, communicates the resolved 2D position of the incident beam over a common digital bus. Experiments using interferometers were conducted in a climate-controlled chamber to evaluate system performance and verify the accuracy. A resolution of 0.1 μ m is attainable in dynamic measurements. The system was calibrated and tested to yield measurement accuracy of ± 0.8 μ m for ± 2 σ probability over the measurement range of ± 300 μ m. Drift of the system in the experimental setup was determined to be less than 2 μ m for measurement in both degrees of freedom within the 10 h period under constant environmental conditions.