In the present work, we investigated the photodissolution and photodiffusion effect on the interface of Ag/chalcogenide $As_{40}Ge_{10}Se_{15}S_{35}$ thin film by measuring the absorption coefficient, the optical density, the resistance change of Ag layer. It was found that the photodissolutioniphotodiffution ratio depends on the magnitude of photon energy absorbed in the chalcogenide thin film and the depth of photodiffution was proportional to the square root of the exposed time. Also, we have investigated the holographic grating formation with P-polarization states on chalcogenide $As_{40}Ge_{10}Se_{15}S_{35}$ thin film and $As_{40}Ge_{10}Se_{15}S_{35}/Ag$ double layer structure thin film. Holographic gratings have been formed using He-Ne laser (632.8 nm) which have a smaller energy than the optical energy gap, $E_g;_{opt}$ of the film, i. e., an exposure of sub-bandgap light $(h{upsilon}