Aiming at the affection of Morié fringe signal quality for high-precision encoder interpolation error，a method of analysis based on quality of morié fringe signals for high precision optical encoder was presented. The signal parameters were obtained with using signal reconstruction and Fourier transform algorithm, which reflects the real Morié signal quality. The accuracy of interpolation error of measurement was improved. While the encoder is motion, the data acquisition card samplings two photoelectric signal with a phase difference of π/2. The signal waveform was got by reconstruction algorithm of sampling the signal. Through the discrete Fourier transform algorithm analyzing reconstruction waveform, the parameters like DC component, amplitude, phase, and harmonic component were solved. Finally, dynamic interpolation error is obtained based on relationship between the signal parameters and interpolation error by experimental verification. Experimental results show that, the interpolation error of a 24-bit absolute rotary optical encoder was measured. Interpolation extreme errors are +0.48" and -0.21". Compared with traditional method of interpolation error measurement, this method measures quickly. It is applicable to real-time detection of encoder dynamic interpolation error at the actual work site.