The generation and extraction process of holography encrypted watermark was simulated by MATLAB software, based on theoretical analysis of Fourier transform holography encrypted watermark. The security of the watermark was proved. The carrier image processed by computer filter and carried the watermark was decrypted by optical decrypted reconstruction system. The original watermark image can be obtained by the right key without the original carrier image. The anti-attack property was tested by the decryption experiment. The original watermark was recovered from the watermarked images distorted by noise added, JPEG compression, part occluded, and low pass filter. The PSNR was computed to be bigger than 20. So the holography encrypted watermark has a good robustness. The optical decrypted reconstruction system has a higher parallelity, processing speed, information dimensions, convenient than the computer simulation system. It can be used for copyright protection.