This paper introduces the recent progress in two-dimensional X-ray diffraction as well as its applications in residual stress analysis in thin films. The stress measurement with two-dimensional x-ray diffraction can be done with low incident angle and is not limited to the peaks with high two-theta angles like the conventional method. When residual stresses of thin films are measured, a low incident angle is preferred to maximize the diffraction signals from the thin films surfaces instead of from the substrates and matrix materials. Since one stress measurement at one fixed incident angle is possible, stress gradients in depth can be measured by series of incident angles. Some experimental examples are given to show the stress measurement at low and fixed incident angle.