In order to measure the retardation of phase retarders accurately, a new method is presented, the errors influencing test results are studied by Müller matrix theory. The measurement setup is composed of polarizing prism, normal quarter-wave plate, analyzing prism, lock-in amplifier and microprocessor. The best Fourier coefficients of the signal are obtained by the least squares method. By the band-limited functions of the lock-in amplifier, the signal-to-noise ratio is improved. A high-accuracy step motor is used to control the rotation angle by the feedback loop system. The theoretical analysis of error proves that the absolute error is less than 0.29°. The retardation of a normal quarter-wave quartz plate is measured with repetitive error less than 0.40°.