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

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-06-14</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

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

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001330689</rptOwnerCik>
            <rptOwnerName>EDELSTEIN BARRY M</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>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle></officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable></nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option-Right to Buy</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>3.26</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-06-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>200000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>3.26</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2007-06-14</value>
                <footnoteId id="F2"/>
            </exerciseDate>
            <expirationDate>
                <value>2016-06-13</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Shares of Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>200000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>200000</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 June 14, 2006 pursuant to the Digital Angel Corporation Transition Stock Option Plan.</footnote>
        <footnote id="F2">The option vests as to 10% of the option shares on each June 14, 2007, June 14, 2008, June 14, 2009, June 14, 2010, June 14, 2011, June 14, 2012, June 14, 2013, June 14, 2014 and 20% of the option shares on June 14, 2015.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Barry M. Edelstein</signatureName>
        <signatureDate>2006-06-16</signatureDate>
    </ownerSignature>
</ownershipDocument>
