Fast Fourier transform (FFT) phase detection method is used to analyze the self-mixing interference signal,without increasing the system′s complexity. By this technique,the self-mixing laser diode (SMLD) micro-displacement measurement technology can obtain nanometre measurement precision. The principle of the self-mixing laser micro-displacement measurement technology is analyzed. The FFT phase detection signal processing is introduced. The optical feeding level,Fourier transform periods length,target moving speed and target vibrating range are analyzed by simulation. Simulation and experimental results show that,this method is suitable to measure target with low speed and small moving range. Choosing proper optical feeding level and Fourier transform periods length,the SMLD micro-displacement sensing technology can obtain measurement precision less than 10 nm.