The verification of the measurement capability of coordinate measuring machines (CMM) is usually performed using gauge blocks or step gauges as reference standards. Gauge blocks and step gauges are robust and easy to use, but have some limitations such as finite lengths and uncertainty of thermal expansion. This paper describes the development, testing and uncertainty evaluation of an interferometric step gauge (ISG) for CMM verification. The idea of the ISG is to move a carriage bearing a gauge block along a rail and to measure the position with an interferometer. For a displacement of 1 m the standard uncertainty of the position of the gauge block is 0.2 mu m. A short range periodic error of CMM can also be detected.