The eccentricity error is one of the main sources of circular grating angle sensors′ measurement error. By deriving the expression of eccentricity error and its trigonometric series, it demonstrates that the eccentricity parameters can be measured and the eccentricity error can be compensated by using two reading heads in opposite direction. Therefore, a procedure to obtain the eccentricity parameters from two reading heads′ counts data by the improved particle swarm optimism algorithm is raised and a real-time FPGA eccentricity error compensation module based on the interval transform and two-tier look-up table is designed, which makes it possible to use only a single reading head after eccentricity parameters have been obtained and achieve virtually the same accuracy as the two reading heads method. The experimental data show that, for the encoder of 320 000 pulses per race used in the experiment, the maximum difference between the counts of a single reading head and the mean counts of two reading heads is 109 before error compensation. Thus, the eccentricity error of a single reading head can be up to 0. 06°, which has a non-negligible influence on angle measurement accuracy. After error compensation, the maximum difference between these two values is 6, and the average difference is only 1. 46, which evaluates the effectiveness of the error compensation method proposed in this article.