A dual-frequency grating interferometer displacement measurement system, comprises a dual-frequency laser, an interferometer, a measurement grating and an electronic signal processing component. The measurement system realizes displacement measurement based on grating diffraction, optical Doppler effect and optical beat frequency theory. Dual-frequency laser light is emitted from the dual-frequency laser and split into reference light and measurement light via a polarization spectroscope. The measurement light is incident to the measurement grating to generate positive and negative first-order diffraction. The diffraction light and the reference light form a beat frequency signal containing displacement information about two directions at a photo-detection unit, and linear displacement output is realized after signal processing. The measurement system can realize sub-nanometer and even higher resolution and accuracy, and is able to measure long horizontal displacement and vertical displacement at the same time.