The applications of digital holography and image processing technology in reconstructing,identificating and extracting hologram of underwater bubble field in the underwater environment are mainly discussed. First,the recording and reconstructing program is completed and used for recording the hologram of underwater bubbles field,and the hologram is denoised and reconstructed. Using edge detection techniques the bubbles are identified and their size are calculated. At last,using neighborhood reconstructing method the number of bubbles in the hologram is figured out. The project is proved practicable by the experiment.