A high speed high resolution heterodyne interferometric method and system are provided. The invention uses two spatially separated beams with slightly different frequencies and has two measurement signals with opposite Doppler shift. The switching circuit selects one of the two measurement signals for displacement measurement according to the direction and speed of the target movement. In this invention, the measurement is insensitive to the thermal variation; the periodic nonlinearity is essentially eliminated by using two spatially separated beams; the measurable target speed of the interferometer is no longer limited by the beat frequency of the laser source.