the present invention provides a method for determining a displacement in a z - direction , of an object which is fixed in a holder of an apparatus , by means of an interferometer system , wherein the object is illuminated by a beam of radiation , said beam being provided by said apparatus and having an optical axis extending in the z - direction . the method comprises arranging the measuring mirror and / or measuring laser beam of an interferometer system such that no relevant part of the laser beam is parallel to the z - direction . this ensures that the interferometer system and its parts may be arranged away from the beam of radiation , allowing larger diameter projection systems for said beam of radiation , as well as more homogeneous air showers around said object . thus the quality of the illumination of the object may be improved . the invention further provides a lithographic apparatus incorporating the method , as well as a device manufacturing method using the lithographic apparatus and / or the method for determining z - displacement according to the invention .