An inspection system is arranged to measure an overlay error by projecting a plurality of radiation beams, differing in wavelength and/or polarization, onto two targets. A first radiation beam is projected onto a first target and the reflected radiation A.sub.1+ is detected. The first target comprises two gratings having a bias +d with respect to each other. The first radiation beam is also projected on to a second target, which comprises two gratings having a bias -d with respect to each other, and the reflected radiation A.sub.1- is detected. A second radiation beam, having a different wavelength and/or polarization from the first radiation beam, is projected onto the first target and reflected radiation A.sub.2+ is detected and projected onto the second target and reflected radiation A.sub.2- is detected. Detected radiations A.sub.1+, A.sub.1-, A.sub.2+, and A.sub.2- is used to determine the overlay error.