One-third probability embedding: a new ±1 Histogram compensating image least significant Bit steganographic scheme ABSTRACT:A new method is introduced for the least significant bit (LSB) image steganography in spatial domain providing the capacity of one bit per pixel. Compared to the recently proposed image steganography techniques, the new method called one third LSB embedding reduces the probability of change per pixel to one-third without sacrificing the embedding capacity. This improvement results in a better imperceptibility and also higher robustness against well-known LSB detectors. Bits of the message are carried using a function of three adjacent cover pixels. DATA HIDING is a technique for embedding information into covers such as image, audio, and video files, which can be used for media notation, copyright protection, integrity authentication, covert communication, etc. Most data hiding methods embed messages into the cover media to generate the marked media by only modifying the least significant part of the cover and, thus, ensure perceptual transparence.Recent reversible data hiding methods have been proposed with high capacity, but these methods are not applicable on encrypted images. In reversible data hiding (RDH), the original cover can be losslessly restored after the embedded information is extracted. Reversible data hiding allows, in addition, recovering the original cover-file exactly. It has been demonstrated that one-third probability embedding outperforms histogram compensating version of the LSB matching in terms of keeping the image histogram unchanged. Existing System: After encrypting the entire data of an uncompressed image by a stream cipher, the additional data can be embedded into the image by modifying a small proportion of encrypted data. With an encrypted image containing additional data, one may firstly decrypt it using the encryption key, and the decrypted version is similar to the original image. According to the data-hiding key, with the aid of spatial correlation in natural image. The images are compressed and the data’s are hided in the compressed image. The quality and the value of the pixels change due to data hide in the image. Due to the change in the originality the images can be easily identified by the hackers. In this proposed system we are using video files to solve this error. Disadvantage: In this existing system the cover file (image) compressed and then the data is hiding behind the compressed image, it will change the originality of the image. The interpolation error is high, thus it leads to low capacity. The distortion of image is higher. The existing system is cost expensive. The existing system has very low embedding capacity. Proposed System: The proposed binary codes, we improve three RDH schemes that use binary feature sequence as covers, i.e., an RS(Recursive Construction) scheme for spatial images, one scheme for JPEG images, and a Pattern substitution scheme for binary images. Novel codes can significantly reduce the embedding distortion. Reversible Data hiding methods embed messages into the cover media to generate the marked media by only modifying the least significant part of the cover and, thus, ensure perceptual transparency. In the proposed scheme, Using LSB-steganalytic methods, the hidden data can be embedded and it will change into image format (icon). It is not viable to extract the additional data and recover the original. For ensuring the correct data-extraction and the system may let the block side length. Introduce error correction mechanism before data hiding to protect the additional data with a cost of payload reduction. Hardware Requirements: SYSTEM : Pentium IV 2.4 GHz HARD DISK RAM : 40 GB : 256 MB Software Requirements: OPERATING SYSTEM : Windows XP Professional. FRAMEWORK : Microsoft Visual Studio .Net 2008. IDE : C#.net 2008. DATABASE : Sql Server 2005.