An advanced electronic phase stepped interferometry (EPSI) system is described for quantitative out-of-plane displacement and surface topography measurements for NDE applications. Image processing algorithms were developed using novel techniques to extend the sensitivity of EPSI and provide near real-time measurement capability. EPSI is known to provide out-ofplane displacement and surface topography measurements on the order of 1/20-1/100 microns. Noise can be a limiting factor, however, and robust phase unwrapping, which is required, remains an open and active research area. A prototype ESPI system was developed and tested using simulated and real data sets of known displacement fields. A robust maximumlikelihood binary-tree (MLBT) phase unwrapping technique was developed, providing greater robustness in the presence of noise than standard techniques. In addition, the MLBT algorithm lends itself to efficient and fast parallel implementations for near-real time implementation. A rank conditioned median (RCM) filter was also tested for improved system performance through noise suppression. The use of these advanced algorithms improves the capabilities of existing EPSI techniques, providing more robustness and near real-time measurements. Results are provided for deformations in Ti-6Al-4V and Al2024-T3 aerospace materials.