Digital holographic particle image velocimetry is a promising technique for the measurement of the instantaneous flow velocity within a volume of a flow. It poses, however—problems of illumination and recording—the major problem of how to extract the information about the location of the particles within the flow and their displacement between two illuminations from the storage medium, i.e., the digital hologram. Various recording parameters, such as the recording distance, the particle size, the wavelength, the size of the CCD chip, the pixel size, and the particle concentration, will considerably affect the results of the reconstruction, and may even determine the success or failure of a measurement. This paper discusses the influence of these parameters and presents a formula for the critical recording distance. Numerical simulations indicate that when the recording distance is near to the critical value, the results of the reconstruction are much better than those obtained far away from it, especially for high particle concentration. An experiment has also been made to validate the analysis.