To solve the critical problem of large gear deviation on-machine: angle displacement measurement that is how to get signal acquisition and accuracy analysis of angle displacement. A new measuring method is proposed, which applies the dividing mechanism (it is composed of friction disc and circular grating) to ensure index and pick up signal of gear corner correctly and strictly according to the principle of angular displacement measurement. Furthermore, the main error which affects measurement accuracy is analyzed, and accuracy is analyzed with geometrical theory such as Fourier series and error synthesis principle etc. The experimental results indicate that angel dividing and signal samplings are easier and more efficient by the dividing mechanism, furthermore, the accuracy is in the range of total error that is permitted by verification, and the mechanism can also meet the requirement of high accuracy, so the method is significance that assessing transmission accuracy of involutes gear.