Dielectric elastomers, such as thermoplastic polyurethanes (TPUs), are widely used as the dielectric layer, encapsulation layer, and substrate of flexible and stretchable devices. To construct capacitors and actuators that work stably upon deformation, it has become urgent to investigate the evolution of dielectricity under stress and strain. However, the lack of effective methods for estimating the dielectric constant of elastomers under strain poses a big challenge. This study reports a device for the in situ measurement of the dielectric constant of TPU under strain. It is found that upon stretching TPU to a strain of 400%, its dielectric constant decreases from 8.02 ± 0.01 to 2.88 ± 0.25 (at 1 MHz). In addition, combined Fourier-transform infrared spectroscopy, the X-ray scattering technique, and atomic force microscopy were utilized to characterize the evolution of the microstructure under strain. The investigation under tensile strain reveals a decreased density and average size of polarized hard domains, along with a tendency of the molecular chains to align in parallel with the tensile stress. The evolution of the microstructures results in a reduction in the measured dielectric constant in TPU.