The Holographic Particle Velocimetry system can be a promising optical tool for the measurements of three dimensional particle velocities. In this study, diffused illumination holographic system to measure the sizes and 3D velocities of moving particles based on automatic image processing was developed. First of all basic optical systems for pulse laser recording, continuous laser reconstruction, and image acquisition, were constructed. To determine the position of particles in the optical axis, new three auto-focusing parameters(AEP), namely, Correlation Coefficient, Sharpness Index, and Depth Intensity were introduced and verified. The developed system was applied to spray droplets to validate the capability of the system. Three dimensional positions of particles viewed from two sides were decided using AFP and then 3D velocities of Particles were extracted by particle tracking algorithm. Comparison of measurement results of sizes and 3D velocities of particles with those obtained by laser instrument, PDPA, showed good consistency of the developed holographic system.