What is the physical target of upscaling in reservoir simulation? Lasseter et al. proposed that scale-up of properties should be done from the scale of a representative elementary volume (REV), a volume for which the measured property does not change with an increase in scale over a given limit of scale. For retaining the original heterogeneous information, the decisive factor is the final grid adopted. Consequently, the REV Grid theorem has been developed, which provides a clear and definite target for reservoir upscaling. Reservoir simulation cases show that using the REV Grid technique, the consistency of the reservoir performances of before and after scale-up is much better than in the case of the conventional upscaling. The new method concentrates on constructing a unique coarse grid, which could best describe the heterogeneity of the original model at given scale. Based on many years of field experience, the new upscaling method developed in this research has the potential to be a significant improvement over existing scale-up methods, especially in field applications.