This paper describes a method for converting a complex Fresnel hologram into a phase-only hologram that can be embedded with large amount of data. Briefly, each row of pixels in the hologram is scanned sequentially in a left-to-right direction. The magnitude of each visited pixel is set to a constant, and its phase is embedded with the data. Subsequently, the error is diffused to the neighborhood pixels. The phase hologram realized with such means, which is referred to as the data-embedded-error-diffusion (DEED) hologram, is capable of preserving high fidelity on the content of the hologram and the embedded data.