An optical method of measuring and displaying depth information has been developed which is based on the Fresnel diffraction properties of coherently illuminated gratings. Cosine modulated gratings are found to be more flexible than simple gratings for depth measurement. A pair of gratings crossed at right angles is used to provide two independent depth measurement channels. A real-time white-light processor has been developed to convert the depth information into pseudocolor. The depth signal is input to a white-light processor by a liquid crystal light valve. The two depth channels are filtered to produce different color images such that the hue of the combined image is a function of depth.