Abstract: Methods of embedding and detecting a watermark into/from a digital image are disclosed. A method of embedding a watermark in accordance with the present invention includes generating a predicted image of an original image by using a linear predictor; generating a difference image by subtracting said predicted image from said original image or vice versa; and segmenting said difference image into sub-regions. The method further includes the steps of calculating a watermark amplitude for each sub-region or for each pixel of each sub-region; performing a channel coding process on a set of watermark data bits; calculating a watermark block for each sub-region by using said encoded data bits, a pseudo random sequence (PRS) and said watermark amplitude; and embedding said watermark block into each sub-region by adding said watermark block with pixel values of each sub-region.