Abstract: In this paper, chaos theory is applied to image scrambling, and a new digital image scrambling algorithm based on chaos is proposed.Then chaotic encryption algorithm is used to encrypt watermark, which can prevent the attackers from detecting the watermark according to statistical methods effectively.The carrier image is putted to DCT transform, and the DCT domain is embedded the watermark.The anti-attack experiments show that the proposed algorithm has strong ability in resisting shear attacks and noise attacks.