In the field of photolithography for micro-chip manufacturing, the photo-mask is used to print desired patterns on a proper photo-resist on wafer. The most common type of photo-mask is binary amplitude mask made an opaque layer of chrome. The principle and potential application of hybrid photo-mask with diffractive phase element and binary amplitude is presented in this dissertation paper from both numerical modeling and experimental research. The first important application is the characterization of aberration in the stepper system using hybrid diffractive photo-mask. By utilizing multiple diffractive illumination conditions, it is possible to characterize Zernike wave front aberration coefficients up to any desired order. And, the second application is the use of binary phase grating mask for analog micro-optics fabrication. This approach of using binary phase grating mask for fabricating analog micro-optics turned out to be a very effective alternative for gray-scale mask technology. Since this is a pure phase only mask, it doesn't cause any scattered noise light like half-tone mask and it results in smooth desired resist profile. The benefits and limitations of hybrid diffractive photo-mask approach for both applications are discussed.