In order to improve installation accuracy of collimator reticle, an installation method based on dig. ital interferometer is proposed. Principles and implementation processes of the method are introduced. Installa. tion accuracy of this and existed methods are analyzed and calculated based on a collimator with 800 mm aper. ture and 20 m focal length. The results show that installation accuracy of this method for any reticle is better than 0.07 mm, which is much higher than that of existed methods.