The theoretical and simulation angular dispersion characteristics of phase-only diffractive element are presented. The multi-wavelength dividing element is a key element in WDM system. Phase-only diffractive optical element (PDOE) used as WDM element has many merits, such as easy coupling, polarization insensitivity, low cross-talk and simple structure. There are two problems should be paid attention to in the design of PDOE. Firstly, the required large dispersion comes along with large diffraction angle. So the Fresnel assumption can not be satisfied in the diffraction calculation. Secondly, in the design of the PDOE, the multi-wavelength Yang-Gu phase retrieval algorithm is utilized to optimize the angular dispersion of PDOE. The convergence of YG algorithm is highly sensitive to the destination value. With the motivations above, it have been proceeded the study of the angular dispersion of PDOE. The theoretical and simulation results are presented in this paper. Based on the Phase Binary Equation, the angular dispersion is analyzed. Latter in this paper, an example PDOE has been designed. In the design process, the convergence of YG algorithm has been assured by the destination value carefully selected based the analysis results of angular dispersion. In the last part of this paper, the diffracted optical field behind the designed PDOE has been simulated with the method of Rayleigh-Sommerfeld diffraction theory. The simulation results are in quite accordance with the analytical results. So the angular dispersion of PDOE has been presented and validated by the works in this paper.