Step gauges are convenient transfer standards for the calibration of coordinate measuring machines. A novel interferometer for step gauge calibrations implemented at VTT MIKES is described. The four-pass interferometer follows Abbe’s principle and measures the position of the inductive probe attached to a measuring head. The measuring head of the instrument is connected to a balanced boom above the carriage by a piezo translation stage. A key part of the measuring head is an invar structure on which the inductive probe and the corner cubes of the measuring arm of the interferometer are attached. The invar structure can be elevated so that the probe is raised without breaking the laser beam. During probing, the bending of the probe and the interferometer readings are recorded and the measurement face position is extrapolated to zero force. The measurement process is fully automated and the face positions of the steps can be measured up to a length of 2 m. Ambient conditions are measured continuously and the refractive index of air is compensated for. Before measurements the step gauge is aligned with an integrated 2D coordinate measuring system. The expanded uncertainty of step gauge calibration is .