A display element includes a substrate and a display pattern formed on the substrate, the display pattern including a diffraction grating. The width in the direction perpendicular to the grating lines of the diffraction grating of the display pattern is selected so as to prevent re-diffraction of the light diffracted by the one diffraction grating. An observation apparatus includes the afore-said display element, but the display pattern has a first diffraction grating structure and a second diffraction grating structure. An illuminating system and an observation system are added so as to allow for observation of the display pattern. The direction of the grating lines of the first diffraction grating structure differs from that of the grating lines of the second diffraction grating structure, thereby preventing the occurrence of a rainbow-like image.