In order to solve the problem that electric paper books have insufficient gray-scales, the improvement algorithm of halftone image processing technology is proposed to realize electric paper books display optimization. On the basis of halftone technology and characteristics of electronic paper, this paper introduces the dithering algorithm and error diffusion algorithm. By improving this two algorithms, the electric paper books can display more gray-scales and have better visual effect. The research is focused on threshold, filter and specific scanning mode of the error diffusion algorithm. A new improved algorithm based on dynamic error detection is put forward in the paper which can effectively improve image gray-scales and greatly improve the image display quality of the electric paper books. Finally, the simulation in the electric paper books system platform is realized and the algorithms mentioned are evaluated by objective image quality assessment.