A high-resolution grating interferometer based on high-density gratings comprises a linear polarization light source, a polarization beam splitter, a first reflector, a second reflector, a third reflector, a fourth reflector, a first quarter wave plate, a second quarter wave plate, a data acquisition, processing and control unit, a double-frequency heterodyne interference photoelectric detection unit and an auto-collimation device, wherein the double-frequency heterodyne interference photoelectric detection unit is composed of a non-polarization beam splitter, a first polarization analyzer placed on orthogonal double-frequency linearly polarized light by 45 degrees, a first detector corresponding to the first polarization analyzer, a second polarization analyzer placed on the orthogonal double-frequency linearly polarized light by 45 degrees and a second detector corresponding to the second polarization analyzer. The high-density gratings are designed to have negative first-class high diffraction efficiency. Thus, subdivided gratings are adopted, so that light beams are diffracted by a scale grating many times and finally are vertically reflected to the reflectors, and light paths return by the way that light paths come; the light beams are diffracted by the scale grating many times, so that a high optical subdivision multiple is obtained, and the resolution of the grating interferometer is improved.