Abstract: In order to study the effect of diffractive stray light on the modulation transfer function (MTF) caused by the binary phase-type Fresnel lens, the wave propagation method was used to simulate the propagation of light waves. The point spread function (PSF) of the system was obtained by coherent superposition of infinite diffractive orders, and the MTF was obtained by the Fourier transform of the PSF. The differences between the modified values and the theoretical design values were analyzed when the number of level was 2, 4 and 8 at the diffraction imaging system with an 80 mm Fresnel lens as primary lens. The results show that the effect of diffractive stray light on the MTF of the system decreases with the increase of the number of level. However, the deviation from the design value is less than 0.5% when the level is 4. Finally, we put forward the idea that the central region of the lens is processed into several levels and the edge part is 2-level to reduce the effect of diffractive stray light. The results show that the idea can achieve the purpose of suppressing effect of diffractive stray light.