A new method based on photoelastic modulation technology for measuring retardation of a wave plate is presented. The theoretical analysis of the measurement principle and error of this method are given by using Miller matrix. The measurement setup is composed of laser source, polarizer, photoelastic modulator, wave plate to be measured, analyzer and photodetector. The retardation of the wave plate is computed by using the normalized fundamental frequency component and the second harmonic component of the detected signals. This method can measure the retardation of wave plate with a large spectral range from ultraviolet to infrared. The error of this method is less than 0.05°. The precision of measurement repeatability is less than 0.0048°, and the feasibility of the method is verified experimentally.