The study deals with the non-contacting ultra-precision in-process measurement of a rotating main spindle displacement in the axial direction by a laser interferometer. The displacement of main spindle, where a cutting tool is mounted, considerably affects the machining accuracy especially in the ultra-precision machining. The fluctuation of cutting force causes the spindle diplacement, which is difficult to measure since it rotates. The experimental setup of the spindle displacement measurement consists of a feed table with the positioning resolution of 1 nm and an air-borne spindle having a through hole, where a reflective mirror is mounted. Measured value at a certain rotational angle during a rotation stands for a spindle displacement since it is stable compared to that measured at an arbitrary angle. As a result, it is found that the system has the potential of making in-process displacement measurement of the rotating spindle with the accuracy of 10 nm.