Rayleigh-Benard convection of viscoelastic fluids in a cavity is investigated using a newly developed grid-by-grid inversion method. In the grid-by-grid inversion method the hyperbolic constitutive equation is split such that the term for the convective transport of stress tensor is treated as a source. This renders the stress tensor a local function of the velocity gradient tensor as in the case of the Newtonian fluids and makes the algorithms for Newtonian fluids applicable to viscoelastic fluids. To corroborate the accuracy of the grid-by-grid inversion method, a linear stability analysis is performed to find the critical Rayleigh number and the domains of Hopf bifurcation and exchange of stabilities in the parameter space. The numerical results from the grid-by-grid inversion method are found to coincide with those of linear stability analysis exactly. Also considered is the standard benchmark problem of viscoelastic flow past a cylinder placed at the center between two plates to confirm the accuracy of the grid-by-grid inversion method. (C) 2009 Elsevier Ltd. All rights reserved.