A heterodyne one-dimensional grating measuring device and measuring method thereof, including a light source, a reading head, a photoelectric receiving module, and a signal processing system. The light source is configured to generate two linearly polarized lights having characteristics of overlapping, polarization orthogonal, and fixed frequency difference. The reading head is configured to receive two beams of polarized lights and be respectively incident on a surface of a moving measuring grating to generate a +1-order diffracted light and a −1-order diffracted light. The photoelectric receiving module is configured to receive the +1-order diffracted light and the −1-order diffracted light to form two paths of beat frequency signals. The signal processing system is configured to perform differential calculation on the two paths of the beat frequency signals to realize a displacement measurement of single diffraction of the measuring grating for four-fold optical subdivision.