New immersed grating technology is needed particularly for use in imaging spectrometers that will be used in sensing the atmosphere O 2 A spectral band (750nm -775 nm) at spectral resolution in the order of 0.1 nm whilst ensuring a high efficiency and maintaining low stray light.In this work, the efficiency, dispersion and stray light performance of an immersed grating are tested and compared to analytical models. The grating consists of an ion-beam etched grating in a fused-silica substrate of 120 mm x 120mm immersed on to a prism of the same material. It is designed to obtain dispersions > 0.30°/nm -1 in air and >70% efficiency. The optical performance of the immersed grating is modelled and methods to measure its wavefront, efficiency, dispersion and scattered radiance are described. The optical setup allows the measurement of an 80mm beam diameter to derive the bidirectional scatter distribution function (BSDF) from the immersed grating from a minimum angle of 0.1° from the diffracted beam with angular resolution of 0.05°. Different configurations of the setup allow the efficiency and dispersion measurements using a tuneable laser in the 750nm-775nm range. The results from the tests are discussed with the suitability of the immersed gratings in mind for future space based instruments for atmospheric monitoring.