This paper proposes a novel common-path laser encoder with a Littrow configuration (CPLi). The CPLi combines the merits of the 1 − x telescope and Littrow mount so that the CPLi can have high tolerance to head-to-scale runout. The CPLi can effectively slash the environmental disturbance effect to its lowest level. The runout tolerance is found to be 1.5–3 times greater than that of our previous work. The experimental results of the CPLi match well with those of the HP5529A for long-range measurements. The CPLi attains a measurement resolution of 0.12 ± 0.021 nm. Its system stability is as low as −0.25 ± 0.098 nm/h. It has a promising potential for nanometer resolution and long-range applications.