Abstract: Existing phase extraction algorithms are just insensitive to some specifically error sources, which can't satisfy the requirements of optical testing for the high precision. An equal-phase interval multi-step phase-shifting algorithm, weighted least square algorithm with underdetermined weight, was introduced. By introducing undetermined weights to the least square algorithm and by analysing the effect of manifold error sources on the algorithm in phase-shifting point diffraction interferometer, several groups of bound equations were obtained and the undetermined weights and the new phase extraction algorithm were determined by solving these bound equations. The new phase extraction algorithm was compared with standard four-step algorithm and Hariharan five-step algorithm. The results illuminate that the new phase extraction algorithm is much more insensitive to the linearity and nonlinearity of second order of PZT, intensity fluctuation in linearity and nonlinearity of 2nd order, linearity and nonlinearity of 2nd order of frequency of light source fluctuation. The results also illunimate that the new algorithm have advantages over other two algorithms in eliminating the CCD quantization, intensity noise, and the frequency noise. Moreover, the new algorithm is insensitive to the CCD nonlinearity at all.