The temperature is important for the properties of laser diode (LD). For increasing lifetime of LD and obtaining steady laser output, the automatic temperature control system to control the current of the thermo electric cooler (TEC) is applied. The temperature control system consists of C8051F350 which integrated with ADC and DAC and MAX1968 with two-way current output. It uses the enhanced digital PID algorithm combining integral separating and shift integration incremental algorithm to achieve the two-way control of the temperature of LD. The result shows that the temperature of laser can reach the value preset rapidly and stably with stability of ±0.03 ℃ while LD working in range from 00-40 ℃.