Grating ruler is the high-precision linear displacement sensor used in the servo control system of CNC machine tools. It is one of the key components affecting the machining accuracy of CNC machine tools. Due to the long life-time of grating ruler, and it will cost a lot of time and resources to evaluate its reliability level by traditional life test. At the same time, there are some incomplete data in the failure data, which will cause inaccurate evaluation results. In this paper, an accelerated life reliability evaluation method of grating ruler based on competing risk model and incomplete data is proposed. Firstly, according to the characteristics of grating ruler, the life distribution model based on competitive risk is established, and the representation method and conversion method of failure data considering incomplete data are proposed. Secondly, the accelerated life test system which can apply temperature and humidity accelerated stress is built, and the reliability level of JFT series closed absolute grating ruler is evaluated by the proposed method. Finally, the proposed method is compared with the single life distribution model to verify the effectiveness.