In this study, an improved phase-shifting diffraction interferometer for measuring the surface topography of a microsphere is developed. A common diode-pumped solid state laser is used as the light source to facilitate apparatus realization, and a new polarized optical arrangement is designed to filter the bias light for phase-shifting control. A pinhole diffraction self-calibration method is proposed to eliminate systematic errors introduced by optical elements. The system has an adjustable signal contrast and is suitable for testing the surface with low reflectivity. Finally, a spherical ruby probe of a coordinate measuring machine is used as an example tested by the new phase-shifting diffraction interferometer system and the WYKO scanning white light interferometer for experimental comparison. The measured region presents consistent overall topography features, and the resulting peak-to-valley value of 84.43 nm and RMS value of 18.41 nm are achieved. The average roughness coincides with the manufacturer’s specification value.