In this paper, a new algorithm for studying elastic wave propagation in the phononic crystals is presented. At first, the displacement-based forms of elastic wave equations are derived and then the forms are discretized using finite difference method. So the new algorithm is called the displacement-based finite difference time domain (DBFDTD). Three numerical examples are computed with this method and the results are compared with experimental measurements and the conventional FDTD method. Also, the computational cost of the new approach is compared with the conventional FDTD method. The comparison showed that the calculation time of the DBFDTD method is 37.5 percent less than that of the FDTD method.