An image-based phase retrieval technique has been developed that can be used on board a space based iterative transformation system. Image-based wavefront sensing is computationally demanding due to the floating-point nature of the process. The discrete Fourier transform (DFT) calculation is presented in “diagonal” form. By diagonal we mean that a transformation of basis is introduced by an application of the similarity transform of linear algebra. The current method exploits the diagonal structure of the DFT in a special way, particularly when parts of the calculation do not have to be repeated at each iteration to converge to an acceptable solution in order to focus an image.