A double gratings displacement measurement system with the resolution of nanometer order is analyzed using optics theory. A mathematic model of the double gratings displacement measurement is established. The characteristics of laser Moiré signals is studied by numerical simulation of Moiré signals. To improve position detection signal sensitivity and positioning accuracy, two methods of precision positioning are brought forward: differential Moiré positioning method and modified Moiré positioning method. The positioning accuracy of the system using differential Moiré technique is better than that of the system using modified Moiré positioning technique. It is because that in-phase noise in the Moiré signals are cancelled and S/N ratio is improved. But modified Moiré positioning system is simple in construction because of only using one grating pair. The compound control system for precision positioning is set up using two kinds of the Moiré alignment technique, in which the modified Moiré alignment technique is used as the coarse alignment and the differential Moiré alignment technique is used as the fine alignment. By using the two-step alignment, the high alignment accuracy and quick alignment speed are obtained in large positioning range. The experimental result shows the two-step alignment can perform positioning accuracy of ±10 nm in ±500 μm positioning range.