A displacement measurement method based on Fabry-Perot interferometer is introduced. In order to overcome the limit in displacement measurement range of usual Fabry-Perot interferometer, the length of the Fabry-Perot cavity is measured by tracing the frequencies of two adjacent resonance peaks using two frequency-tunable lasers, and the displacement of the measurement mirror can be determined by the length change of Fabry-Perot cavity. The measurement range can be expanded to millimeter level by using this method. The main factors that affect the measurement accuracy are analyzed briefly and the result shows that the displacement measurement accuracy of nanometer level can be achieved.