Evolution of shear banding in fully dense electrodeposited nanocrystalline Ni was successfully monitored by using a digital image correlation technique under a quasi-static uniaxial tensile load. To investigate the microscopic physical mechanism of the shear banding, in-situ tensile testing for the nanocrystalline Ni sample was conducted in a transmission electron microscope and fracture surface of the sample was examined by field emission scanning electron microscope. The results suggest that grain boundary migration based on atomic diffusion is a main carrier of the shear banding.