A novel self-mixing interference signal analysis method is proposed based on the use of an electro-optic modulator (EOM). Self-mixing interference occurs in the laser cavity by reflecting the light from a mirror-like target in front of the laser. Sinusoidal phase modulation of the beam is obtained by an EOM in the external cavity. The phase of the interference signal is calculated by four-bucket integration technique. The interferometer is applied to measure the displacement of a high-precision commercial PZT with an accuracy of a few nanometers.