We present a novel information or key encryption and transmission technique based on phase-shifting digital holography for a security system. Phase-shifting digital holography is used for recording phase and amplitude information on CCD device. 4-step phase-shifting is implemented by moving the PZT mirror with equidistant phase steps of π/2. The information and the key are converted to random phase patterns. Digital hologram in this method is Fourier transform hologram and quantized with 256 gray-level. The basic idea is that we reuse a 256 gray-level digital hologram to encrypt the information or the key with 4-step phase-shifting digital holography. The encrypted binary data/image in the form of digital hologram can be transmitted through communication network, and is reconstructed and decrypted digitally. The simulation shows that the proposed method gives good results for a successive encryption/transmission.© (2006) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.