Abstract: This paper proposed a novel reversible data hiding scheme in encrypted image which exploits an integer transform to achieve both high embedding capacity and security.In the proposed scheme, content owner implements an integer transform on the pixel groups which are selected by a transform key and composed of two adjacent pixels.Based on properties of the transform,the original pixels values can be recovered perfectly if one of LSBs(Least Significant Bit)in the transformed pixel group is altered.Data hider can seek the transformed pixel groups out from the encrypted image with the same transform key, select one pixel in each transformed group using an embedding key and embed additional data reversibly by replacing corresponding LSBs of the chosen pixels. Only if the receiver has both the transform key and embedding key, can the secret data be extracted without error.Only if the receiver has both the transform key and encryption key, can the original image be recovered perfectly. The experimental results demonstrate that additional data can be embedded and extracted directly in encrypted domain and the original image can be recovered losslessly. Besides, the embedding rate can reach 0.47 bpp(bit per pixel).

Key words: image encryption, integer transform, high embedding capacity, reversible data hiding