Abstract: Classical distance measuring optical interferometer systems determine the desired measured distance by measuring phase differences between two light waves; two light waves are needed to uniquely determine distance and direction of motion. A third light wave is used for making the system insensitive to variations in brightness of the light source. This invention provides a distance or optical phase decoding system having three output light waves that uses all of the available light for the measurement and provides for increased resolution of measurement through simple rotational adjustments.