A compact laser collimation system is presented for the simultaneous measurement of five-degree-of-freedom motion errors. The optical configuration of the proposed system is designed, and the principle of the measurement of five-degree-of-freedom errors is described in detail. The resolution of the roll and the horizontal straightness is doubled compared with other laser collimation methods. A common optical path compensation method is provided to detect light drift in real time and compensate for straightness and angle errors. An experimental setup is constructed, and a series of experiments are performed to verify the feasibility and stability of the system. Compared with commercial instruments, the pitch and yaw residuals are ± 2.5 ″ and ± 3.5 ″ without correction, and the residuals are ± 1.9 ″ and ± 2.8 ″ after correction, respectively. The comparison deviations of the horizontal straightness and vertical straightness changed from ± 4.8 μ m to ± 2.8 μm and ± 5.9 μm to ± 3.6 μm, respectively. The comparison deviation of the roll is ± 4.3 ″ . The experimental results show that the data of the five-degree-of-freedom measurement system obtained are largely the same as the measurement data of commercial instruments. The common optical path compensation can effectively improve the measurement accuracy of the system.