Underwater acoustic images are acquired using sonar instrument that uses sound propagation to navigate and map the sea floor. The sonar devices are effectively used to create images of large area of the seabed. However, the visual perception of the object in the acoustic image depends on refraction, which is a function of changes in the speed of sound in successive layers of water. And refraction depends mainly on temperature, slightly on salinity and hydrostatic pressure. The quality and resolution of sonar imaging of the bottom depends on many other factors such as pitch, yaw and heave of the side scan sonar, the presence of volume scatterers in the water body, the distance of the sonar from the bottom and orientation of the object. Generally, the objects in an acoustic image would be of small size compared to their normal size as the distance between the sonar and object is larger. To detect and recognize the objects in the images, the resolution should be enhanced. In this paper, we propose an efficient edge preserving interpolation method for underwater acoustic image resolution enhancement which preserves the edge sharpness. The method handles the diagonal pixels in the first pass, in turn fills the horizontal and vertical pixels in the second pass. The results obtained are compared with the state-of-the-art interpolation techniques and the performance measures such as Peak Signal to Noise Ratio (PSNR) and Structural Similarity Index Measurement (SSIM) shows an improved result.