A method of determining an overlay error between two successive layers produced by a lithographic process on a substrate, including using the lithographic process to form a calibration structure including a periodic structure of the same pitch on each of the layers, such that an overlaid pair of periodic structures is formed, the structures being parallel, but offset relative to each other by an overlay amount. A spectrum produced by directing a beam of radiation onto the calibration structure is measured and compared with one or more modeled spectra so as to determine values of the grating parameters for the calibration structure from the measured spectrum. The lithographic process is used to form further overlaid periodic structures on the same or one or more subsequent substrates, the determined grating parameter values for the calibration structure being used to determine overlay amounts for the further overlaid periodic structures.