Interest in holographic, or diffractive, optics has been rekindled in the last few years with demonstrated advances in three areas: computer-aided design (CAD) tools, VLSI lithographic and dry etching processes, and mathematical modeling of diffractive elements.1 The availability of CAD tools and electron-beam lithography led first to the emergence of computer-generated holography (CGH). CGH work at Honeywell was started and brought to maturity by Arnold2 in 1980-1983. However, because of the inherently low diffraction efficiency (-10%), lithographic CGHs have found a place in only a relatively few practical applications, such as testing diamond turned aspherics, and thus CGHs have not been widely accepted within industry. The first step in changing this situation came in the 1970s with numerical approaches to rigorously solve the vector field equations for diffraction from blazed gratings.3 The extensive numerical results from these models not only showed that high diffraction efficiencies are possible with etched surface profiles, but also indicated the sensitivity to various profile configurations and design parameters. Veldkamp et al.1,4'-'61 at MIT Lincoln Laboratories have taken the final step necessary to establish the practical feasibility of diffractive optics by using reactive ion etching techniques to produce the surface profiles prescribed by the numerical models and delineated by CGH lithographic masks. With this combined approach, they have demonstrated the feasibility of high-efficiency diffractive elements for a variety of diverse applications, such as the CO2 laser radar telescope,4 coherent beam addition of laser diode arrays,5 and on-axis, broadband, aspheric lens elements for infrared imagers.6 These elements are fabricated using well-established VLSI lithographic and dry etching techniques. Moreover, the ability to replicate each diffractive element provides the potential for high-volume, low-cost producibility. With this precedent, Honeywell has become convinced that the emerging diffractive optics technology may be practical for some of its products. To assess the technology and determine its utility, a major initiative program has been established at Honeywell Systems and Research Center to set up a complete design and prototype fabrication facility for diffractive optics. This paper summarizes the results of this activity.