This Letter presents a method of an optical sensor for measuring wavelength shifts. The system consists of a diffraction grating and a total internal reflection heterodyne interferometer. As a heterodyne light beam strikes a grating, the first-order diffraction beam is generated. The light penetrates into a total internal reflection prism at an angle larger than the critical angle. A wavelength variation will affect the diffractive angle of the first-order beam, thus inducing a phase difference variation of the light beam emerging from the total internal reflections inside the trapezoid prism. Both the experimental and theoretical results reveal that, for the first-order diffractive beam, the sensitivity and resolution levels are superior to 5°/nm and 0.006 nm, respectively, in the range of wavelength from 632 to 634 nm, and are superior to 3.1°/nm and 0.0095 nm in the range from 632 to 637 nm. For the theoretical simulation of the fourth-order diffractive beam, they are superior to 6.4deg/nm and 0.0047 nm in the range from 632 to 637 nm.