Difficulties often arise for digital image correlation (DIC) technique when serious de-correlation occurs between the reference image and the deformed image due to large deformation. An updating reference image scheme could be employed to deal with large deformation situation, however that will introduce accumulated errors. A large deformation measurement scheme, combining improved coarse search method and updating reference image scheme, is proposed in this paper. For a series of deformation images, the correlation calculation begins with a seed point and spreads out. An improved coarse search method is developed to calculate the initial correlation parameters for the seed point, which guarantees that the correlation calculation can be carried out successfully even in large deformation situation. Only for extremely large deformation, the reference image is updated. Using this method, not only extremely large deformation can be measured successfully but also the accumulated error could be controlled. A polymer material tensile test and a foam compression test are used to verify the proposed scheme. Experimental results show that up to 450% tensile deformation and 83% compression deformation can be measured successfully.