This paper presents a common-path laser planar encoder (CLPE) for displacement measurements in the X- and Y- axes. The CLPE can effectively reduce the environmental disturbance to its lowest level. The experimental results of the CLPE match well with those of HP5529A for both short and long ranges. The CLPE can measure 2D displacement with high resolutions of 0.07 ± 0.021 nm and 0.07 ± 0.023 nm in the X- and Y- axes and also presents high system stabilities of −0.59 ± 0.43 nm/h and −0.63 ± 0.47 nm/h respectively in the X- and Y- axes. The CLPE has promising potential for nanometer resolution and large-range applications.