Laser tracker is an important optical instrument for precise geometric coordinate measurement in large scale. Position sensitive detector(PSD) is a core miss-distance detecting sensor in laser tracking system, which achieves precise position tracking of cooperation target. The detecting precision has remarkably direct influence on the performance of tracking and measurement. Firstly, one laser tracking measurement system was presented, and the working principle of the system′s tracking unit based on PSD was introduced. Then the miss-distance detecting module was designed and built based on PSD according to the actual demand. The module′s signal process circuit for weak signal detection was emphatically analysed, which met the requirements of PSD driving, I/V conversion, signal amplification, analogy signal filtering, parameter matching and efficient using of AD resources simultaneously. The output signal of PSD module was acquired by a four-channel and synchronous analogy to digital converter. The signal was processed by FPGA which worked in the form of finite state machine. A composite digital filtering algorithm revised from median and mean filtering method was proposed to reduce noise interfering. Based on FPGA an extended divider was put forward to improve accuracy of measurement. Through omitting the low-order byte of the numerator of coordinate formula, one two-step operation of the divider was used to extract effective decimal places. The experimental result shows that the stability of spot position is better than ±2.0 μm in the square effective area 4 mm×4 mm. The further tracking experiment indicates the miss-distance detection method can well meet the demand of the precise and rapid target tracking.