An infrared optical modulation using associative memory technique is addressed. The proposed holographic associative memory is used to replace the optical modulator (reticle) by using a Fourier hologram. The target radiant flux is collected by optical system. A hologram is inserted in the optical path between the optical lens of the optical system and the detector in the focal plane of the lens. When the IR fluxes illuminate the hologram, the hologram redirects the flux to the desired direction. After the energy transferred by the detector arrays, we can get the codes, corresponding to the position of target, from the output of detector arrays by particular arrangement of the redirected radiant flux. Thus, generating the electric signal corresponding to target position in the IR tracking system by optical signal processing becomes easy and effective. Besides providing directional information, it can also be used for background suppression. By use of the optical signal processing and neuron network theorem, the background radiation of the IR system can be suppressed effectively.