Study on the transverse displacement measurement by uses of the critical angle method and a CCD, the technique based on the critical angle method and the use of the image system of CCD is presented. We used an objective with the NA value of 0.7 and the magnification of 100 to enhance the displacement resolution and utilized the critical angle characteristic of a parallelogram prism to improve its image sensitivity. Then, the image from the CCD is resolved and analyzed using a personal computer and the Matlab program to calculated the transverse displacement. It has some advantage, such as, non-contact, non-destructive, non-interfering, and real-time measurement , low cost and sub-micron resolution.