In this article we demonstrate how to obtain the ultimate lateral resolution in surface plasmon microscopy (SPM) (diffraction limited by the objective). Surface plasmon decay lengths are determined theoretically and experimentally, for wavelengths ranging from 531 to 676 nm, and are in good agreement. Using these values we can determine for each particular situation which wavelength should be used to obtain an optimal lateral resolution, i.e., where the plasmon decay length does not limit the resolution anymore. However, there is a trade‐off between thickness resolution and lateral resolution in SPM. Because of the non‐optimal thickness resolution, we use several techniques to enhance the image acquisition and processing. Without these techniques the use of short wavelengths results in images where the contrast has vanished almost completely. In an example given, a 2.5 nm SiO2layer on a gold layer is imaged with a lateral resolution of 2 &mgr;m, and local reflectance curves are measured to determine the layer thickness. The SPM image is compared with an atomic force microscopy image of the same object. We obtain a 3 &mgr;m resolution when thickness differences within a lipid monolayer are imaged and measured.