An atmospheric imaging system based on quantum hyper-entanglement has been developed. Hyper-entanglement refers to entanglement in more than one degree of freedom, e.g. polarization, energy-time and orbital angular momentum (OAM). The system functions at optical or infrared frequencies. Only the signal photon propagates in the atmosphere, the ancilla photon is retained within the detector. This results in loss being essentially classical, giving rise to stronger forms of entanglement. Bell state generation and Bell state measurement, i.e. the ability to distinguish the various Bell states is discussed. A mathematical representation of Bell state generation and the Bell state analyzer, including a projection operator describing the measurement process is provided. Signatures for unique detection of the various Bell states are developed. A method and design for creating states hyper-entangled in polarization, energy-time, OAM and the radial quantum number is examined. Hermite-Gaussian (HG) modes, Laguerre-Gaussian (LG) modes, OAM dependence of the LG modes and a method of mode conversion are discussed. A projection operator that represents the combined measurements between the different degrees of freedom is provided. A model of generation and detection efficiencies for the different degrees of freedom and the implications for signal to noise ratio (SNR), signal to interference ratio (SIR), the quantum Cramer-Rao lower bound, and the measurement time are provided in closed form. A formula describing how hyper-entanglement greatly improves the maximum detection range of the system is derived. The formalism permits random noise and entangled or non-entangled sources of interference to be modeled.