Abstract: In this paper the numerical dispersion characteristics of nonorthogonal FDTD algorithm in two- dimensional oblique Cartesian coordinates are discussed in detail. The numerical dispersion equation is derived and the dispersion curves in a varity of cases are obtained. The theoretical results show that the dispersion effects are related tightly with the grid sizes, the direction of the wave propagation and the angles between two edges of each grid. When the nonorthogonal FDTD algorithm is used in practice to resolve electromagnetic problems in time domain, in order to reduce the numerical dispersion effects the grids in the computational space should be chosen to have as closely similar shapes and same sizes as possible.