Real-time monitoring of latent images in photoresist during the holographic exposure of submicron period diffraction gratings is reported. The first-order diffraction efficiency is recorded as a function of time for different resist thicknesses and polarizations. By monitoring the diffraction efficiency in real time, the process can be controlled to compensate for variations in exposure dose, resist thickness, and the optical properties of underlying materials. It is demonstrated that latent image monitoring (LIM) can be performed in real time and that the diffraction efficiency correlates well with the linewidth. To interpret diffraction efficiencies with changes in resist thickness and polarization, rigorous coupled wave analysis combined with a commercial software package to simulate the real-time data was used. However, the data show evidence for slow changes in the composition of the resist during exposure that are consistent with chemical intermediates reacting with water in the film. The commercial exposure simulation tool cannot account for these phenomena, which complicate the application of LIM to real-time exposure control.