A method of detecting and compensating fail pixels in a holographic storage system. The method includes steps of: providing a plurality of image frames to show on a data plane for all pixels on the data plane being capable of outputting a light state or a dark state; sequentially recording the image frames into a storage medium; detecting the image frames by using a detecting apparatus for all pixels on the detecting apparatus being capable of outputting sensing signals corresponding to the light state and the dark state; defining a sensing difference value, which is a difference of the sensing signal outputting the light state and the dark state generated by one pixel; comparing the sensing difference value with a threshold value; and defining the corresponding pixel is a fail pixel if the sensing difference value is smaller than the threshold value.