Cure shrinkage of the polymer matrix during the composite manufacturing process leads to residual stresses, which can adversely affect the structural integrity and dimensional stability of composite structures. In this paper, a novel approach is developed for measuring the resin shrinkage and strain evolution of an epoxy resin (EPON-862) in the composite manufacturing environment. The resin is cured in a custom designed autoclave with borosilicate viewports, while digital image correlation (DIC) is used to analyze the strain evolution throughout the cure cycle. These processing induced strains are correlated to the cure-state using differential scanning calorimetery (DSC). The different mechanisms involved in the polymer strain evolution during composite processing are discussed.