Cryptography techniques aim to achieve security in communications by enciphering data. Unlike cryptography, the term Steganography refers to a set of techniques designed to provide covert communication between partners by embedding additional information into an unsuspicious communication. As a field of Steganography, the purpose of digital image watermarking (DIW) is to embed additional information into an image. This information can be later on used for copyright protection, authentication or security control purposes. In order to be reliable, DIW techniques must proof to be resistant against malicious attacks and non-malicious attacks. This means the watermark must survive both common image manipulations and intentional operations aimed to break it. In this project a digital image watermarking system is implemented that takes advantage of the least significant bit (LSB) replacement method.