<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0201</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2004-03-16</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000771252</issuerCik>
        <issuerName>DIGITAL ANGEL CORP</issuerName>
        <issuerTradingSymbol>DOC</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001252182</rptOwnerCik>
            <rptOwnerName>NIEUWSMA KEVIN L</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>490 VILLAUME AVENUE</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>SOUTH ST. PAUL</rptOwnerCity>
            <rptOwnerState>MN</rptOwnerState>
            <rptOwnerZipCode>55075</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Vice President</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable></nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option-Right to Buy</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>3.79</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2004-03-16</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>100000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>3.79</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2007-03-16</value>
            </exerciseDate>
            <expirationDate>
                <value>2014-03-15</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Shares of Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>100000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>100000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">The option was granted by the Board of Directors on March 16, 2004 pursuant to the Digital Angel Corporation Transition Stock Option Plan and is subject to shareholder approval of an amendment to the plan to increase the number of shares subject to the plan.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Kevin L. Nieuwsma</signatureName>
        <signatureDate>2004-03-17</signatureDate>
    </ownerSignature>
</ownershipDocument>

