The error diffusion algorithm is good for reproducing continuous images to binary images. However the reproduction of edge characteristics is weak in power spectrum an analysis of display error. In this paper an edge enhanced error diffusion method is proposed to improve the edge characteristic enhancement. Spatial gradient information in original image is adapted for edge enhance in threshold modulation of error diffusion. First the horizontal and vertical second order differential values are obtained from the gradient of peripheral pixels(3x3) in original image. second weighting function is composed by function including absolute value and sign of second order differential values. The proposed method presents a good visual results which edge characteristics is enhanced. The performance of the proposed method is compared with that of the conventional edge enhanced error diffusion by measuring the edge correlation and the local average accordance over a range of viewing distances and the RAPSD of display error.