Large scale terrain visualization with high-resolution has an increasing demand in many research fields. To realize the efficient rendering of terrain, this paper presents an out-of-core terrain visualization method based on multi-resolution storage techniques. In external memory, the terrain data set is subdivided from top to bottom to build a multi-resolution hierarchical structure based on a quad-tree. The hierarchical structure can decimate the elevation data that must be loaded into internal memory. Thus it can improve the efficiency of I/O access greatly. Moreover, in order to implement rapid data retrieval of the real time terrain flyover, an efficient indexing algorithm is proposed, in which those nodes in the hierarchical structure will be divided into several clusters in terms of the similarities of static error and the closed space constraint. In addition, a method for crack-free is also proposed here. The comprehensive experiment conducted on the GTOP30 data set shows that this approach outperforms the Block and the Hierarchy algorithms in the both ways of efficiency and simplification ratio.