Abstract: A novel kind of image cryptosystem—image hiding cryptosystem is proposed in this paper. The key information of secret image is encrypted and then hidden into another image, which can be publicly accessed. Because it is ordinary image, it will not attract the attention of illegal eavesdropper and the secret image is protected well by the camouflage and the encrypt algorithm. The experiment shows that the PSNR of the restored secret image can be as high as 22 83 dB , indicating that the restored secret image has satisfactory quality. The new crypto system has three benefits. First, the secret image is protected by the camouflage which is an ordinary image publicly accessed. Second, the cryptosystem compresses image data using wavelet transform and vector coding. Third, information of secret image is encrypted by the DES algorithm, which ensures the system’s security.