This article presents a new approach to the design of confocal differential heterodyne interferometer (CDHI), which is a combination of differential heterodyne interferometer (DHI) with confocal laser scanning microscopy (CLSM). The CDHI can measure a step height over a quarter of wavelength of the light source, which can not be accurately measured by DHI and CLSM, respectively. The approach is that it utilizes a beam-scanning method instead of transporting a sample to be measured. The measurement results carried out for samples having step height are found to be comparable in precision with those measured by commercial scanning electron microscopes.