An interferometer provides a large dynamic range for perpendicular displacement measurements. In operation, a measurement reflector on an object reflects a measurement beam to an overlying Porro prism, and a reference reflector on the object returns a reference beam to the interferometer. A second Porro prism in the interferometer can return the reference beam for a second pass to the reference reflector, while the measurement beam complete only one pass. Reductions in beam walk-off result from retroreflections in the Porro prisms and the matching effects that some object rotations have on measurement and reference beams. Perpendicular motion of the object relative to the first Porro prism causes a Doppler shift only in the measurement beam. Accordingly, a beat frequency found when combining the measurement and reference beams can indicate a residual Doppler shift associated with the motion in the perpendicular direction.