Digital volume correlation (DVC) measures the internal deformation of an object by analyzing two volumetric images in unit of voxel. In the practical implementation of DVC, integer-voxel displacement can be readily acquired by use of a simple searching scheme performed in spatial domain. How to achieve sub-voxel accuracy has been considered as the key to improve the accuracy of DVC measurements. A spatial-gradient based sub-voxel algorithm is proposed, and the principle of the algorithm is described in detail. The sub-voxel algorithm is investigated in terms of accuracy and computational efficiency using computer generated volume data and actual volume images recorded using laser scanning confocal microscope. Results show that the proposed algorithm can be used as a simple yet effective technique for accurate internal deformation measurement.