The main challenge working with underwater imagery results from both rapid decay of signals due to absorption, which leads to poor signal to noise returns, and the blurring caused by strong scattering by the water itself and constituents within, especially particulates. The modulation transfer function (MTF) of an optical system gives the detailed and precise information regarding the system behavior. Underwater imageries can be better restored with the knowledge of the system MTF or the point spread function (PSF), the Fourier transformed equivalent, extending the performance range as well as the information retrieval from underwater electro-optical system. This is critical in many civilian and military applications, including target and especially mine detection, search and rescue, and diver visibility. This effort utilizes test imageries obtained by the Laser Underwater Camera Imaging Enhancer (LUCIE) from Defense Research and Development Canada (DRDC), during an April-May 2006 trial experiment in Panama City, Florida. Imaging of a standard resolution chart with various spatial frequencies were taken underwater in a controlled optical environment, at varying distances. In-water optical properties during the experiment were measured, which included the absorption and attenuation coefficients, particle size distribution, and volume scattering function. Resulting images were preprocessed to enhance signal to noise ratio by averaging multiple frames, and to remove uneven illumination at target plane. The MTF of the medium was then derived from measurement of above imageries, subtracting the effect of the camera system. PSFs converted from the measured MTF were then used to restore the blurred imageries by different deconvolution methods. The effects of polarization from source to receiver on resulting MTFs were examined and we demonstrate that matching polarizations do enhance system transfer functions. This approach also shows promise in deriving medium optical properties including absorption and attenuation.© (2007) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.