A direction discrimination technique for laser Doppler measurements, called two-phase detecting, is discussed. The intensity distribution of the single-period rectangular phase grating diffraction pattern is calculated. The diffraction efficiency of a phase grating is compared with that of an amplitude grating with same grating constant. A laser Doppler grating vibrometer based on the two-phase detecting technique and the rectangular phase grating is experimentally researched. The operation principle of this instrument and the related signal processing are explained in detail. Some typical experimental results in agreement with the theoretical analysis are given.