A new kind of security hologram using an encoded reference wave is presented. The hologram is produced with the interference of an encoded reference wave and a convergent object wave. The encoded reference wave is formed from a plane wave that has passed through a random phase plate. When the hologram is illuminated with a duplicate of the reference beam, a verification pattern (a bright spot) is produced in the output plane. Only if the random phase plate matches the hologram, does sharp focus emerge. Because the verification pattern is simply a spot peak rather than an image pattern, this kind of security hologram is suitable for machine inspection. Therefore, it can be used for better counterfeit‐resistant security codes in the form of embossed easy‐to‐copy holograms. Initial experimental results are given. © 1996 Society of Photo−Optical Instrumentation Engineers.