This paper outlines the procedure for refining the digital image correlation (DIC) method by implementing a second-order approximation of the displacement gradients. The second-order approximation allows the DIC method to directly measure both the first- and second-order displacement gradients resulting from nonlinear deformation. Thirteen unknown parameters, consisting of the components of displacement, the first- and second-order displacement gradients and the gray-scale value offset, are determined through optimization of a correlation coefficient. The previous DIC method assumes that the local deformation in a subset of pixels is represented by a first-order Taylor series approximation for the displacement gradient terms, so actual deformations consisting of higher order displacement gradients tend to distort the infinitesimal strain measurements. By refining the method to measure both the first- and second-order displacement gradients, more accurate strain measurements can be achieved in large-deformation situations where second-order deformations are also present. In most cases, the new refinements allow the DIC method to maintain an accuracy of ±0.0002 for the first-order displacement gradients and to reach ±0.0002 per pixel for the second-order displacement gradients.