A method for smoothing measured displacements and computing strains utilising finite element and least-squares methods is proposed. Nodal displacement values of a finite element model are determined by fitting the interpolation functions of elements to measured displacement values using the method of least-squares. The displacements in the region where the measurement values are not obtained or unreliable are determined by solving finite element equations. Then, strains are obtained using a displacement-strain relationship. The validity is demonstrated by applying the proposed method to the displacement distributions of a plate with a hole obtained using finite element method and those around a crack tip obtained using digital image correlation. Results show that the displacements and the strains can be determined accurately by the proposed method. Furthermore, the strains near free boundaries and strain concentration region can be computed. As strains can be evaluated easily and accurately, the proposed method can be used as one of the data processing methods for optical methods.KEY WORDS: digital image correlation, displacement, finite element method, hybrid method, least-squares method, optical methods, strain 258 Ó