Laser Technology Inc. (LTI) proposes a Phase II SBIR research project to further develop a Compact Shearography System, Analysis Method and Software for micro-crack detection in concrete. There is an urgent need to detect and characterize fine cracks in concrete that form because of various damage mechanisms including alkali-silicate reaction, delayed ettringite formation or frost damage. Fine shrinkage cracks do not pose a structural problem in the static sense, their presence can promote deterioration processes that over time can lead to failure. They allow water to penetrate, which can lead to ASR and DEF, the corrosion of steel reinforcements and fatigue cracks. Work performed by the researchers herein demonstrated shearography can detect non-visible cracks in concrete. Under a Phase I SBIR, we developed and field demonstrated a prototype instrument for micro-crack detection in concrete. Under the Phase II proposed work plan, LTI will further develop the equipment hardware and software for crack analysis and test a number of concrete samples. Shearography will be used to evaluate the HIPERPAV II concrete shrinkage crack model using a modified VTT Finnish early age shrinkage test. We will conduct literature search of crack detection and measurement methods and compare performance with the developed shearography system.