Abstract: Etalon or Fabry Perot interferometer (FPI) based on multi beam interference principle can generate very narrow fringe and is sensitive to cavity length change. In this paper, three kinds of applications in length measurement of Etalon and FPI are reviewed: frequency locking and stabilization of lasers, precision positioning using optical multiplier and applications in nanometrology. The obstacle and the solutions in using FPI are also presented and the trend of FPI is given next. At last the possibility and importance of FPI in nanometrology is specially emphasized.