The two beams are recombined after traversing two optical paths, and the interference pattern after recombination allows the determination of the difference in path lengths.
[1] Light from a source (left) is collimated by a lens and split into two beams using slits.
The beams are sent through two different paths and pass through compensating plates.
They are brought to a focus by a second lens (bottom) where an interference pattern is observed to determine the optical path difference in terms of wavelengths of the light.
Its drawbacks are (i) it requires a point or line source of light for good fringe visibility, and (ii) the fringes must be viewed with high magnification.