Polarization microscopes are widely used to image the magnetic domains of a magneto-optical disk and to characterize the birefringence of the disk substrate. For high-resolution imaging, unfortunately, the coupling of the polarization rotation from the Kerr signal, the effect of Fresnel's reflection coefficients, and the substrate birefringence severely deteriorate the image contrast obtained from conventional observations. Here we present the technique of differential polarization microscopy, which replaces the analyzer with a Wollaston prism, for providing better image contrast. Images of a magnetic pattern obtained with both conventional and differential methods are observed for objective lenses that have different numerical apertures and magneto-optical disks with and without a birefringent substrate. The computer simulations and experimental results show that the use of this differential method improves the image contrast and provides excellent tolerance for defects of the optical system.