An optical element, includes: a diffractive functional layer which diffracts at least part of incident light; and a grid formed on a first surface of the diffractive functional layer, the grid including a plurality of fine wires and having a polarization separation function; wherein the optical element reflects a part of the incident light while transmitting another part of the incident light, the first surface of the diffractive functional layer including: a plurality of first regions; a plurality of second regions, a height thereof relative to a second surface of the diffractive functional layer being different from that of the first regions, the second surface being an opposite surface to the first surface; and a step provided at a border between the first regions and the second regions.