Displacement measuring sensors play an essential role in all aspects of dimensional metrology. They can be used for direct displacement measurements but more often they are part of a measurement system, such as an atomic force microscope, roughness tester or a coordinate measuring machine (CMM). In order to achieve traceable measurements that can be related to the meter, these sensors must be calibrated against a reference standard that is more noise- and error-free than the sensor under test. A description of the various methods to achieve the ultimate traceability, repeatability and accuracy of such a calibration system is the main part of this paper. Various interferometric methods will be reviewed including several methods that use directly a primary standard as a reference: either an iodine-stabilized laser or a frequency comb. It is shown that various methods exist to quantify or mitigate the periodic errors that are inherent to interferometric methods. Also it is shown that knowledge of this periodicity may lead to a separation of periodic and non-periodic non-linearity errors of both the calibration instrument as the sensor under test. This review is limited to small-range sensors, typically with a range <100 μm. It is concluded that today’s technology enables sound and traceable sensor calibration up to the sub-nano and even picometer level of uncertainties