Aiming at the limitations of the existing measuring technology, the paper presents a novel method for inclination angle measurement of inertial platform based on LD-PSD. The proposed scheme adopts autocollimation principle, using a laser diode(LD) as the light source and a two-dimensional position sensitive detector(PSD) for laser spot sensing. The light from LD is first converted to parallel light, and then projected onto a reflector on the inertial platform. The returned light falls on PSD at last. When the inclination angle of inertial platform moves, the laser spot on PSD changes correspondingly, providing 2-D inclination angle information of inertial platform. According to its working principle, a mathematical model of inclination angle measurement is established. High accuracy and long stable working time are the key indexes to implement the measurement system. Considering several main factors including the uniformity and size of laser beam, laser beam excursion, temperature and laser interference etc, which influence the precision and stability, improving methods are put forward. The measurement system, consisting of optical structure, PSD signal processing and inclination angle calculation, is introduced in detail. Finally, calibration and experiment are carried out to verify its performance. The result of the experiment shows that the resolution of the measurement system reaches 0.05" with a working rang of ±600" and the indication error is less than ±0.5" within 24 hours. The measurement system can exactly and reliably measure the inclination angle of inertial platform and monitor the drift of inclination angle for a long time.