The diffraction efficiency of the volume grating written by Ar+ 514.5 nm laser tow-wave-mixing in Ce:KNSBN crystal and read out by He-Ne 632.8 nm laser beam is experimentally studied,which exhibits a loop versus the variation of the fringe modulation.Then this nonlinear diffraction property is applied in a coherent image processing system to obtain the real-time image edge-enhancement operation without reversing the signal-to-pump beam ratio.