A method and apparatus of encrypting optical images using binarization or phase only information is presented with a number of ways to secure the image also being provided. An image to be encrypted is first multiplied by a random phase function. The Fourier transform of the product of the image and the random phase function is then multiplied by another random phase function in the Fourier (or Fresnel) domain. Taking the inverse Fourier (or Fresnel) transform, an encrypted image in the output plane is obtained. Alternatively, the image to be encrypted can be phase encoded and then encrypted to provide an extra level or security. The image can be secured using one key in the Fourier or Fresnel domain followed by phase extraction. This encrypted image may then binarized, which may include binarizing the phase-only part of the encrypted image. The use of binarization enables ease of implementation and data compression while still providing recovery of images having good quality. The original image may be recovered from the phase-only part of the encrypted image, the binarized encrypted image, or the binarized phase-only part of the encrypted image.