In this study, we first propose the use of edge-preserving regularization in optimizing an ill-conditioned problem in the reconstruction procedure for diffuse optical tomography to prevent unwanted edge smoothing, which usually degrades the attributes of images for distinguishing tumors from background tissues when using Tikhonov regularization. In the edge-preserving regularization method presented here, a potential function with edge-preserving properties is introduced as a regularized term in an objective function. With the minimization of this proposed objective function, an iterative method to solve this optimization problem is presented in which half-quadratic regularization is introduced to simplify the minimization task. Both numerical and experimental data are employed to justify the proposed technique. The reconstruction results indicate that edge-preserving regularization provides a superior performance over Tikhonov regularization.