After analyzing the principle of imaging of the objective, a method of depth measurement in the direction of optical axis in micro-manipulation system is put forward. To measure depth, the relationship between defocus and blur of microscopic images is established based on optical transfer function （OTF）. This method has high precision and good linearity, since lens parameters and diffraction effect have been taken into account. Meanwhile, the fast identification algorithm of bar objects is utilized to simplify the original method, then depth can be measured online. In addition, the method is applied to micro-manipulation system, and an experiment to insert one needle into another automatically in defocused status is designed and carried out to show the effectiveness of the method. Thus, the operation range of the micro-manipulation system has been extended.