A method of monitoring overlay is used in a manufacturing process in which successive layers are deposited one over another to form a stack. Each layer may include a periodic structure such as a diffraction grating to be aligned with a periodic structure in another layer. The stacked periodic structures may be illuminated to form + and − first order diffraction patterns from the periodic structures. An image of the stacked periodic structures may be captured including + and − diffraction patterns. The + and − diffraction patterns may be compared to calculate the overlay between successive layers.