A Dammann grating interferometer using transverse Zeeman laser as light resource is developed in this paper.It takes advantages of reducing the effect of thermal expansion.Drift of the air refraction index can be easily conquered due to equivalent beam length.It is an attractive configuration with resolution of 0.7 nm.The error caused by the depolarization effect of the grating is analyzed.Calibration experiment between this grating interferometer and a differential dual-frequency interferometer has been implemented.The experimental results show that the equal divisions of the grating pitch by 8 times via optical system and the nonlinearity error is no more than 25 nm when the grating pitch equals 20 μm.