This paper presents a new self-calibration method for calibrating the linearity error of two dimensional displacement sensors. By using this method, the linearity error can be calibrated accurately without using any other accurate calibration reference. This method utilizes the special feature of the two dimensional displacement sensor so that the self-calibration can be realized easily and effectively. In this paper, the proposed method is applied to calibrate two dimensional position-sensing devices (PSD). A calibration system, which consists of only a laser diode, an X-Y stage and a two dimensional PSD, is constructed. The laser diode is placed on the X-Y stage, and the PSD is fixed spatially. The laser beam from the laser diode is used to scan two-dimensionally the surface of the PSD by moving the X-Y stage. Two kinds of PSD were calibrated using the calibration system, and the experimental results confirming the effectiveness of the proposed method are presented.