Abstract: With the continuous development of cloud computing technology, the reversible data hiding in encrypted images (RDHEI) has received more and more attention. But most of the reversible data hiding in encrypted images are based on grey-scale, which have great limitations in application scenario compared to color images. Moreover, since the current reversible data hiding methods in the encrypted domain mainly focus on grayscale images, and there are few optimizations for the characteristics of color images, it is hard to obtain better performance by applying these algorithms, so it is of high value to further investigate the reversible data hiding algorithm in color encrypted images. In this paper, we propose a high-performance RDHEI of color images algorithm for the first time based on color channels correlation and entropy encoding (RDHEI-CE) for cloud computing. First, the RGB channels of the color image are separated and the prediction errors are derived separately. Next, the embedding space is generated by adaptive entropy encoding and prediction errors histogram. The correlation between color channels is then used to further expand the embedding space and embed secret message on the encrypted image. Finally, the marked encrypted image must be scrambled in order to resist a ciphertext-only attack. Compared to most state-of-the-art RDHEI methods, experimental results show that the RDHEI-CE method provides a greater embedding rate and better security and broadens the application scene of reversible data hiding in the cloud.