A new finite element method for elliptic problems with locally periodic mic
rostructure of length epsilon > 0 is developed and analyzed. It is shown th
at the method converges, as epsilon --> 0, to the solution of the homogeniz
ed problem with optimal order in epsilon and exponentially in the number of
degrees of freedom independent of epsilon > 0. The computational work of t
he method is bounded independently of epsilon. Numerical experiments demons
trate the feasibility and confirm the theoretical results.