The dynamic characteristic of CNC (computer numerical control) machine tools is a critical role to decide the accuracy and speed of machine. It is very important to improve the precision and reduce the motion error so as to manufacture complex and fine products. In general, the motion error is estimated by a two or three-dimensional ball bar measurement system. Although this technology is capable of dynamical measurement, its condition should be confined to a low speed or a large radius. A new measurement method for measuring circular motion error of CNC machine tools is proposed in this paper. The instrument consists of a dual-frequency laser interferometer, a beam splitter and two corner cubes. In order to evaluate the exactness of the results we get from our measurement system, we use RSF’s grid encoder to do another experiment and compare both the results. According to the results shown, our measurement system can measure both of the X and Y axes of the plane of the CNC stage in a small scale at the same time and can simplify the calibration procedure as well as shorten the time of measurement. This method can accomplish the two-axis measurement at a high speed, without being restricted by radius variations. It is a good, simple and effective measurement method.