With recent advances in high-speed computer and video capture technology, holographic films used in classical holography can be replaced with charged-coupled devices (CCD) and complementary metal-oxide-semiconductor (CMOS) image sensors to record and numerically reconstruct a hologram, which is now known as digital holography. Digital holography introduces something new to optical science. Wet chemical processing and other time-consuming procedures can be removed, so numerical recording and reconstruction can be realized in almost real time. It allows us to characterize the phase of a light field as well the intensity, and so the whole wave field can be measured and stored in a computer. Digital holography is expanding applications of holography and becoming a scientific and technological tool. Its use has now increased for measuring amplitude and the phase of object waves, displacement and three dimensional shape, particle distributions and motions, characterization of the refractive index and biological tissues, and vibration analysis, etc. Here, basic principles of digital holography for optical measurement and characterization are described. Taking into consideration the rapid advance in CCD and CMOS sensors as the background, the state-of-the-art applications of digital holography to optical measurement and characterization are presented.