The principle of optical eigenfunction is used in the analysis of speckle reduction in laser projection display. When the moving diffuser is used in the speckle reduction approach, the speckle contrast is decided by both the degree of freedom (DOF) of the projector and the area of resolving cell of the eyes on the screen. It can gain high DOF of the projector by increasing the space-bandwidth product, i.e., adopting a projection lens with a high numerical aperture or a large viewing field. The best scheme is equalizing the DOF of the scattering wave from a moving diffuser to that of the projection lens. The experimental results are in accordance with the conclusion drawn by optical eigenfunction.