Diffraction gratings integrated with micro-electro-mechanical-systems (MEMS) offer shot noise limited subnanometer displacement detection sensitivities but are limited in detection range for mechanical transducers. A two-wavelength readout method is developed that maintains high sensitivity while increasing the detection range, which is demonstrated using a MEMS spectrometer with integrated diffraction grating. The two-laser illumination extended the detection range from 105 nm to 1.7 mu m assuming the readout sensitivity is maintained at >50% of the maximum sensitivity.