A steganographic method offering a high hiding capacity is presented in which the techniques of digital holography are used to distribute information from a small secret image across the larger pixel field of a cover image. An iterative algorithm is used to design a phase-only or complex hologram from a padded version of the secret image, quantizing this data according to the carrier data bits that are available within the intended cover image. By introducing the hologram data only into low-order bits of larger amplitude cover pixels, the change in the cover image remains imperceptible to the casual observer, with a peak signal-to-noise ratio of >40 dB.