The dye sublimation transfer process, which allows continuous density gradation, is a process by which an image quality close to that of silver halide photographs can be obtained. However, deviations in process characteristics lead to deterioration in gradation characteristics in the highlight area and degradation in the image quality, such as color saturation and tone jumping in the highlight area. This paper describes a highlight error diffusion method for improving the gradation characteristics of highlight areas and stabilizing the microdensity, which will become an issue when implementing the method in a dye sublimation process. This method involves an algorithm that corrects the amount of heat applied to pixels based on the average density near those pixels. The proposed method improves gradation characteristics of the highlight area without visually recognizable granularity.