The residual stress in thermal barrier coatings (TBCs) fabricated from coating deposition plays a vital role in the coating design and processing parameters optimization. The main objective of the present work is to determine the interfacial residual stress in TBCs by means of miniature ring-core cutting and the digital image correlation (DIC) method. Both the ring-core cutting and the dot pattern used for DIC deformation measurement are implemented by the focused ion beam (FIB) milling on the cross-section of a coating. A finite element model (FEM) is developed to simulate the ring-core cutting process. From the FEM, the calibration coefficients are determined for general applications. The surface of the ring-core containing dot patterns is recorded before and after the FIB milling process. DIC technique is then performed to calculate the surface displacement caused by the release of residual stresses due to the cutting. Results demonstrate that the interfacial residual stress in TBCs is nearly in a uniaxial stress state and has a tendency to be compressive toward the interface. Finally, essential aspects of the technique are discussed.