A numerical reconstruction technique of digital holography based on angular spectrum diffraction by means of the ridge of Gabor wavelet transform (GWT) is presented. Appling the GWT, the object wave can be reconstructed by calculating the wavelet coefficients of the hologram at the ridge of the GWT automatically even if the spectrum of the virtual image is disturbed by the other spectrum. It provides a way to eliminate the effect of the zero-order and the twin-image terms without the spatial filtering. In particular, based on the angular spectrum theory, GWT is applied to the digital holographic phase-contrast microscopy on biological specimens. The theory, the results of a simulation and an experiment of an onion specimen are shown.