A two-step phase-shifting hiding technique for a fully phase-based image is proposed. A reference beam was generated with a laser illuminating the host image using our modified Mach–Zehnder interferometer (MZI) design, and an object beam was injected into a fully phase-based image that is to be hidden. A reference beam was used to engage the image-hiding function while providing phase changes in the hologram recording process. After Fresnel diffraction occurred on the two paths of the MZI, the diffracted waves were detected as interference patterns on a charge-coupled device plane, which resembled the host image’s Fresnel diffraction pattern. A theoretical analysis is provided alongside the experimental results.