A displacement detecting device includes a scale diffraction grating and a detecting head unit. The detecting head unit includes a light source, a first retroreflecting unit that retroreflectes positive first-order diffracted light of light diffracted by the scale diffraction grating, such that the retroreflected light enters the scale diffraction grating again, a second retroreflecting unit that retroreflectes negative first-order diffracted light of the light diffracted by the scale diffraction grating, such that the retroreflected light enters the scale diffraction grating again, and a light receiving unit that receives an interference signal. Each of the first retroreflecting unit and the second retroreflecting unit has a deflecting function of deflecting light incident on the corresponding retroreflecting unit by a predetermined angle and then emitting the light.