Digital holography is the process where an object's phase and amplitude information is retrieved from intensity images obtained using a digital camera (e.g. CCD or CMOS sensor). In-line digital holographic techniques offer full use of the recording device's sampling bandwidth, unlike off-axis holography where object information is not modulated onto carrier fringes. Reconstructed images are obscured by the linear superposition of the unwanted, out of focus, twin images. In addition to this, speckle noise degrades overall quality of the reconstructed images. The speckle effect is a phenomenon of laser sources used in digital holographic systems. Minimizing the effects due to speckle noise, removal of the twin image and using the full sampling bandwidth of the capture device aids overall reconstructed image quality. Such improvements applied to digital holography can benefit applications such as holographic microscopy where the reconstructed images are obscured with twin image information. Overcoming such problems allows greater flexibility in current image processing techniques, which can be applied to segmenting biological cells (e.g. MCF-7 and MDA-MB- 231) to determine their overall cell density and viability. This could potentially be used to distinguish between apoptotic and necrotic cells in large scale mammalian cell processes, currently the system of choice, within the biopharmaceutical industry. Â© 2009 SPIE.