We propose a new subdivision technique directly subdividing the grating stripe by using complementary metal-oxide semiconductor (CMOS) microscopic imaging system combined with image processing. The corresponding optical system, subdivision principle, and image processing methods are illuminated. The relations of systemic resolution to subdivision number, grating period, magnifying power and tilt angle are theoretically discussed and experimentally checked on the Abbe comparator. The measurement precision for displacement of the proposed subdivision system is tested in the range of 5 mm and the maximum displacement error is less than 0.4 micron. The factors contributing to the systemic error are also discussed.