Abstract: Segment the original bitmap into 8×8 blocks, make Discrete Cosine Transformation (DCT) in the 8×8 block and quantize the coefficients. Take the Direct Current (DC) coefficients out of the DCT coefficients of different blocks and decompose the DC coefficients bit by bit. Put the bits decomposed by the DC coefficient onto the least significant bits of the Alternating Current (AC) coefficients in the same 8×8 block and the DC coefficient is hidden. As all the DC coefficients being hidden, shuffle all the DCT coefficients of the original bitmap according to a shuffling matrix. And then, accomplish the lasting coding process of JPEG compression. Experimental results and analyses show that the algorithm produces good performance of high visual quality with strong sensitivity, and generate the cipher-image with almost the same size as that of the directly compressed JPEG image. Finally, the proposed algorithm is compatible with JPEG file format.