We propose a new three-step phase-shifting algorithm, which is much faster than the traditional three-step algorithm. We achieve the speed advantage by using a simple intensity ratio function to replace the arctangent function in the traditional algorithm. The phase error caused by this new algorithm is compensated for by use of a look-up-table (LUT). Our experimental results show that both the new algorithm and the traditional algorithm generate similar results, but the new algorithm is 3.4 times faster. By implementing this new algorithm in a high-resolution, real-time 3D shape measurement system, we were able to achieve a measurement speed of 40 frames per second (fps) at a resolution of 532 × 500 pixels, all with an ordinary personal computer.