An asymmetric dual images encryption method based on optical cylindrical diffraction is proposed. Firstly, discrete cosine transform is performed on two grayscale images to obtain the corresponding spectrum. The low frequency data and the 1/3 high frequency data of the two discrete cosine transform spectra are respectively reserved, and the low frequency and the 1/3 high frequency of one of the images are merged into a new composite spectrum, which is subjected to cylindrical diffraction and phase truncation to generate amplitude and a key for decryption. The generated amplitude is encrypted in the same way with the low-frequency data of the second image to generate a new amplitude and a key for decryption. Finally the newly generated amplitude is fused with the 1/3 high-frequency data of the second image into a new composite spectrum. The phase truncation after cylindrical diffraction produces ciphertext and a new key for decryption, where the ciphertext becomes 1/4 of the original image. Numerical simulations prove that the proposed algorithm can effectively perform dual image encryption with high key sensitivity and good robustness. Encryption tests on two images with grayscale of 512×512 show that the reconstructed images are of high quality, the correlation coefficient values are higher than 0.97, and the peak signal-to-noise ratio is greater than 33 dB. The optical image encryption based on cylindrical diffraction overcomes the symmetry of the traditional plane diffraction, and the inner cylinder radius, cylinder height and diffraction distance of the cylindrical diffraction can be used as an additional key to the encryption system, which enlarges the key space and increases system security.