Based on Michelson interference, we propose a micro-displacement information extraction method using imaging principle and image processing. The processing object of the method is equal inclination fringes collected by planar-array CCD camera. The image preprocessing for each frame includes denoising, top-hat transformation, binarization, morphology operations. Then radius of the bright interference fringe at the center of the image is obtained by feature recognition. By comparing the change trend and amplitude of the radius of frame sequence, the method realizes displacement information extraction. Experiments show that detection resolution of the method is λ/4 by making use of the information provided by every frame, which is superior to the maximum resolution of λ/2 of the detection by interference fringe counting .