Rock-fluid interactions in shale formations are one of the main sources of wellbore instability issues and inadequate stimulation performance. For better planning of fracturing operations and optimizing production from these reservoirs, it is important to understand the mechanisms behind these interactions. These issues are especially prevalent in clay-rich shales, such as Tuscaloosa Marine Shale, which is the subject of this study. Conventional techniques to quantify these shale-fluid interactions comprise of measuring swelling in powdered rock grains or measurement of deformation in the whole pieces of the core using a linear variable differential transformer and strain gages. However, the contribution from individual laminae to overall deformation cannot be evaluated using these methods. In this study, we developed an experimental setup to evaluate the spatial deformation in shale during interaction with water using digital image correlation (DIC). Deformation of two shale samples, with 34 wt% to 51 wt% clay content, was studied. White paint was used to generate a random speckle pattern on the specimen and then immersed in deionized water. The deformation process was captured using a digital camera and images were analyzed using DIC to quantify the deformation. The implementation of the DIC technique enables the visualization and quantification of spatial deformation in the specimen during interacting with water. The results show the localization of large strains in select laminations. The results provide a better understanding of shale deformation when interacting with water in comparison to traditional measurements that can provide only an average strain value.