A technique to align automatically the beams of displacement-measuring interferometric gauges is described. The pointing of the launched beam is modulated in a circular pattern, and the resulting displacement signal is demodulated synchronously to determine the alignment error. This error signal is used in a control system that maintains the alignment for maximum path between a pair of fiducial hollow-cube corner retroreflectors, which minimizes sensitivity to alignment drift. The technique is tested on a developmental gauge of the type intended for the Space Interferometry Mission. The displacement signal for the gauge is generated in digital form; and the lock-in amplifier functions of modulation, demodulation, and filtering are all implemented digitally.