The laser diode pumped two-frequency solid-state laser with tunable frequencydifference is investigated, the medium is a 1at% doped 2-mm thick Nd:YAG chip. The condition of stable two-frequency oscillation operation is analyzed, the polarization is calculated by Jones matrix in different locations at the resonator. It is proved that the two-frequency electric field vectors are orthogonally polarized everywhere, the frequency difference tuning can be realized by changing the angle between the fast axes of two quarter-wave plates. In the experiment, single-frequency oscillation was obtained with the help of an etalon, then longitudinal mode frequency splitting resulted in the two-frequency oscillating operation by inserting two quarter-wave plates. The obtained maximum frequency difference was 1.3GHz, the minimal was 50MHz because of the strong mode competition. Due to the loss anisotropy of the etalon, the output power is not very stable when tuning the frequency difference, 85mW two-frequency output power was obtained with 100MHz beat note.