In this paper, a new method for determining the forming limit diagram (FLD) of thin sheet metals, called DIC-Grid method, is proposed based on digital image correlation (DIC) technique. It's assumed that there exists one virtual grid with an initial diameter of 2.5mm, which is usually the same dimension as the grid in traditional circular grid analysis, close to the crack of specimen, and the limit strain point on FLD is determined by the deformation of this virtual grid. The DIC-Grid method has been compared with traditional circular grid analysis and the standard ISO/FDIS 12004-2 in Nakajima tests. The results show that the forming limit strains obtained by the newly proposed method are more stable and precise. Furthermore, DIC-Grid method can avoid the measurement error which exists in the circular grid analysis. Meanwhile, it overcomes the shortcomings of time-consuming data processing and non-applicable for unrealistic strain distribution in the method of ISO standard. In addition, the effect of the ratio between DIC frame rate and the punch velocity on the determination of forming limit strains is studied, and the minimum value of this ratio is suggested.