A new type of digital holographic microscopy based on a modified lateral shearing interferometer (LSI) is proposed for the detection of micrometer- or nanometer-scale defects on transparent target objects. The LSI is an attractive interferometric test technique because of its simple configuration, but it suffers from the so-called 'duplicate image’ problem, which originates from the interference of two sheared object beams. In order to overcome this problem, a modified LSI system, which employs a new concept of subdivided two-beam interference (STBI), is proposed. In this proposed method, an object beam passing through a target object is controlled and divided into two areas with and without object information, which are called half-object and half-reference beams, respectively. Then, these two half-beams make an interference pattern just like most two-beam interferometers. Successful experiments with a test glass panel for mobile displays confirm the feasibility of the proposed method and suggest the possibility of its practical application to the visual inspection of micrometer- or nanometer-scale defects on transparent objects.