Holographic optical element(HOE) lens is an imaging element fabricated through recording wavefront by interference. Because of its advantages of small form factor and wavelength, angle selectivity and arbitrary wavefront formation, it has a good application prospect in augmented reality display. To make the system more compact, the HOE is set as an off-axis optical element. At the same time, due to its diffraction principle, its wavelength response is more sensitive than traditional refractive and reflective optical elements. Thus the fabrication and design of a full-color HOE lens is a challenge to optimize the free-space head-up displays system. To systematically analyze the HOE imaging system, the conjugate relation between the object and image is derived by scalar diffraction theory. Then the Gaussian conjugate imaging equation is obtained and the off-axis aberration of distortion and astigmatism in the HOE imaging systems are analyzed. In addition, A head-up display with FOV of 18°and eyebox of 10mm is simulated and its imaging process is visualized through the geometric optics method of k-vector diagram and ray-tracing. A full-color HOE lens with high diffraction efficiency was fabricated by interference. Its average peak diffraction efficiency is 56%, reaching the highest level in the world. A prototype of augmented reality system is established by combining laser pico-projectior with HOE lens. The experimental results of distortion and astigmatism effects of the system are obtained, which are consistent with the simulation results. The MTF parameters of the system are measured, and its definition basically meets the resolution requirements of the human eye. The aberration of the system is analyzed and the optimization method is proposed. To optimize the monochromatic image quality, an extra cylindrical lens is added to ensure the same optical power of meridian and sagittal plane to eliminate astigmatism. Besides, a freeform wavefront is designed by geometric construction method and form a freeform HOE to deal with the distortion problem. The local recording freeform wavefront can be calculated by the imaging equation. When full-color HOE is applied in the display system, the images of three channels may separate in the space because of their different reconstruction wavelengths and angles. We propose a pre-compensation method of in the recording process to solve this problem. If these above problems can be solved, due to its good image uniformity, sufficient field angle and eyebox area, the head-up display based on HOE lens with extra optical power will have a better application in augmented reality technology.