On the basis of fractional wavelet transform, we propose a new method called cascaded fractional wavelet transform to encrypt images. It has the virtues of fractional Fourier transform and wavelet transform. Fractional orders, standard focal lengths and scaling factors are its keys. Multistage fractional Fourier transforms can add the keys easily and strengthen information se-curity. This method can also realize partial encryption just as wavelet transform and fractional wavelet transform. Optical reali-zation of encryption and decryption is proposed. Computer simulations confirmed its possibility.