In this study, design and fabrication of bi-focal diffraction optical elements (DOEs) with sub-micrometer and eight-level structure are presented. The principle of phase iteration algorithm was applied to design the bi-focal DOEs. To reduce the production costs, a complete LIGA process was successfully demonstrated to replicate DOE devices. With computer-aided design of DOE patterns, a combination of lithography, an inductively coupled plasma anisotropic etching technique, a nickel (Ni) micro-electroplating process (as a metal mold) and a chemical mechanical polishing process was used to produce a metal mold of bi-focal DOEs. Later the Ni mold served as a master for the hot embossing process to replicate the DOE device onto a PMMA sheet. Since the DOEs consist of eight-level structure and the feature size is down to sub-micrometer range, the demolding technique is one of the key factors in the hot embossing process. The study presents an innovative demolding mechanism to demold the master from the PMMA sheet without damaging the sub-micrometer DOE patterns. Finally, the optical properties of PMMA-based DOEs were measured and compared with the simulation result.