Non-contact photoelectric measuring method is important to realize micro-displacement measurement. Position sensitive device (PSD) is a kind of light spot position detecting sensor. Its detection accuracy and data processing method based on PSD can directly affect the location measurement accuracy. The working principle of PSD is that photocurrent intensity output from each electrode is inversely proportional to the distance between the position of the incident light and each electrode. According to this principle, the scheme of the two-dimensional laser position detecting system has been designed. In order to improve the stability of the output weak current signals from PSD and the location detection accuracy, signal conditioning circuit design, parameters matching, filtering method and real-time parallel algorithm are mainly studied. The experiment results indicate that, within ±2 mm square area, the stability accuracy of the single point of this detecting system based on PSD is better than 2 μm. Therefore, this system can satisfy the requirements of space target accurate positioning of the laser tracker in funded project and application requirements like real-time high accuracy micro-displacement measurement based on laser position detecting.