In this paper, an asymmetric multiple-image cryptosystem is proposed using LUP decomposition (LUPD) in the spherical diffraction (SpD) domain. To the best of our knowledge, the SpD transform is applied to the optical encryption for the first time. In the proposed cryptosystem, multiple grayscale images are encoded into a sparse and binary amplitude distribution with the cascaded LUPD and SpD transform. The matching private keys are generated by LUPD, which is convenient for administrative permissions by setting different numbers of private keys. Since LUPD and SpD are both non-linear processes, high security can be achieved to resist attacks such as the retrieval attack. In addition, up to 12 plaintext images can be encrypted with high decryption quality using the proposed cryptosystem. On the other side, the sparse and binary ciphertext can be stored or transmitted with 1/8 space compared with general 8-bit-grayscale ciphertext, which is a merit of using LUPD. The feasibility and effectiveness of the proposed asymmetric cryptosystem are verified by numerical simulation results.