Thermoplastic polyurethanes (TPUs) and other elastomers are widely used in many applications for the advantages they provide in terms of high elasticity, lightness, resistance to breakage, and impact resistance. These materials exhibit strong hysteresis in the large strain stress-strain behavior, known as cyclic softening or the Mullins effect. Despite the extensive studies on this phenomenon and the importance of Poisson’s ratio, how the Poisson’s ratio of these materials changes during cyclic uniaxial tests is still unclear. Here, we measure the nonlinear Poisson’s ratio of TPU and investigate its correlation with cyclic softening using two-dimensional digital image correlation (2D-DIC) combined with the reference sample compensation (RSC) method. This accuracy-enhanced method can effectively eliminate the measurement errors induced by the unavoidable out-of-plane displacements and lens distortion. We find that the Poisson’s ratio of TPUs also exhibits large hysteresis in the first cycle and then approaches a steady state in subsequent cycles. Specifically, it starts from a relatively low value of 0.45 ± 0.005 in the first loading, then increases to 0.48 ± 0.005 in the first unloading, and remains largely constant afterward. Such a change in the Poisson’s ratio results in a slight volume increase (≈1%) at a maximum strain of 17.5%. Our findings are useful for those who use finite element method to analyze the mechanical behavior of TPU, and shed new light on understanding the physical origin of cyclic softening.