An iterative algorithm and a denoising method for accuracy enhancement of three-dimensional (3-D) reconstruction processes by shadow moiré is proposed. Using traditional shadow moiré for 3-D reconstruction leads to a nonuniform phase shift error. The proposed iterative algorithm eliminates this error by using three phase-shifted interferograms and obtains precise phase information. Moreover the proposed denoising method, which is based on undecimated wavelet transform, effectively eliminates noise and grating patterns while retaining useful information. The proposed phase shifting shadow moiré method is compared with the structured lighting method, which is a common method for 3-D reconstruction, and it is further compared with traditional shadow moiré. The methods are simulated in a 3ds-Max environment. The simulation results show that the proposed shadow moiré technique achieves greater accuracy in comparison with the traditional shadow moiré and structured lighting techniques and also it has higher accuracy than existing typical phase-shifting algorithms.