A high-resolution Kerr microscope was developed for observations of in-plane or perpendicular magnetized domains with widths down to 0.2 μm. Our main interest was to optimize the magnetization contrast, derived from the Kerr rotation and Kerr ellipticity, without anti-reflective coating of the magnetic surface. This is made possible by parallel argon laser illumination, a quarter-wave retarder, an imaging aperture matched to the resolution necessary and by optimized adjustment of the illumination and polarizing optics, controlled by a contrast-measuring difference photo-amplifier. The effect of laser interference patterns is minimized by a wobble plate which rotates in the beam. Real-time digital video image processing (512 × 512 pixels × 16 bit) allows subtraction of non-magnetic background and further contrast enhancement. Wall displacements are observed with a time resolution of 50 half-frames per second. Domains and their response to applied fields were investigated in magnetic microstructures.