Apparatus for, and method of, measuring a parameter of an alignment mark on a substrate in which an optical system is arranged to receive at least one diffraction order from the alignment mark and the diffraction order is modulated at a pupil or a wafer conjugate plane of the optical system, a solid state optical device is arranged to receive the modulated diffraction order, and a spectrometer is arranged to receive the modulated diffraction order from the solid state optical device and to determine an intensity of one or more spectral components in the modulated diffraction order.