Abstract: A micro distance controller based on a Nios processor was designed to locate precisely for a visual indicator in virtual imaging equipment. By using a Field Programming Gate Array(FPGA) to realize the subdividing drive of Pulse Width Modulation(PWM) controller for a stepper motor and to implement the phase identification and frequency doubling of output signals of a grating sensor, the digital system of the micro-distance controller was constructed. With the design tool of Quartus II from Altera′s and an Embedded Design Suite Nios, the Nios processor and programming hardware circuits were integrated into one chip, so the system shows excellent flexibility and speediness from the parts of software and hardware. Experimental results indicate that the proposed micro distance controller achieves a good visual indicator position in virtual imaging equipment, and the controlling accuracy of micro distance can reach 2.5 μm.