In this paper we use a superluminescent diode (SLD) as the light source of an interferometer and extract a narrow spectrum from a wide spectrum of the SLD with a Fabry-Perot Etalone (FPE). By varying sinusoidally the distance between the two mirrors of FPE, the central wavelength of the narrow spectrum is scanned sinusoidally. The distance between the mirrors is exactly set by a feedback control system, and sinusoidal phase-modulated SLD light that has a large scanning width of about 10 nm can be obtained with high stability and spatial uniformity. The phase of the interference signal has two different components. One is amplitude Z(b) Of sinusoidal phase modulation, which is proportional to the optical path difference (OPD) and the scanning width. The other is conventional phase alpha, which provides a fractional value of the OPD in the range of the wavelength. By combining the two values of the OPD obtained from Z(b) and alpha, an exact OPD larger than the wavelength can be measured with high accuracy in alpha. Characteristics of the interferometer are made clear through step-profile measurements.