To fabricate a scale grating for a surface encoder in a cost-effective way, a blue laser diode with a wavelength of 405 nm is employed in a Lloyd's mirror interferometer to carry out interference lithography (IL) of the grating. The beams from the laser diode are collimated by an aspherical collimating lens to form beams with a diameter of 50 mm. These beams are then projected towards the Lloyd's mirror and the grating substrate, which are aligned perpendicularly with each other and are mounted on a rotary stage. One half of the beam directly goes to the grating substrate, and the other half reaches to the grating substrate after being reflected by the mirror. The direct beam and the reflected beam interference with each other to generate and expose the interference fringes, which correspond to the scale grating structures, on the substrate coated with a photoresist layer. The pitch and area of the grating structures are set to be 570 nm and around 300 mm 2, respectively. The fabricated grating structures are evaluated with an AFM to investigate the influence of the spectrum width of the laser beam.