As overlay tolerances of microlithographic technology become increasingly severe, conventional bright-field metrology systems are limited by image resolution and precision. Scatterometer (angular scatterometer or spectroscopic reflectometer, for example) has the advantages of good repeatability and reproducibility, and is proposed as an alternative solution for overlay metrology. Previous studies have applied a spectroscopic reflectometer, which is as function of incident wavelength, to overlay measurement. This work investigated overlay measurement by using an angular scatterometer, which is as function of incident angle. A focused laser spot was incident on linear grating, an overlay target. An angular signature, a 0th-order reflective light beam, scattered from linear grating was measured when the incident and reflective angles were changed simultaneously. The overlay target consists of two linear gratings located on two different layers of a stacked structure, and the overlay error is the misalignment between these two different layers. The measured results using angular scatterometer (also known as the diffraction-based method) are compared with using the bright-field microscope (also known as the image-based method), which use a bar-in-bar target as an overlay target. Statistical data sets demonstrate that angular sctterometer has nearly one order better of repeatability and tool induced shift than conventional bright-field microscope. Additionally, a series of different parameters of overlay targets, such as different pitches, line-to-space ratios, and stacked structures is designed and manufactured. The sensitivity of overlay measurement of various linear grating targets is also measured and discussed.