Digital holography for micromeasurement is an active research topic. With respect to the requirement of realizing characterization of micro-scale structures in microelectromechanical systems with high resolution and accuracy, in-line configuration is studied in this paper as the fundamental structure of a digital holography system. A mathematical model based on Fourier optics is developed to analyze the digital recording mechanism and properties of the system in comparison with those of the commonly used off-axis arrangement. Theoretical analysis and experimental results demonstrate that in-line configuration is advantageous in enhancing the system performance. Besides the relaxed requirement of spatial resolution on the CCD sensors and the greater flexibility of the system, higher lateral resolution and lower speckle noise can be achieved. © 2000 Society of Photo-Optical Instrumentation Engineers.