A novel gray-level digital watermarking is proposed.It uses grayscale image instead of binary image as the watermark.The watermark image is decomposed using two layer wavelet transformation and a simple quantization technique is used to further decompose the coefficients into bit sequences.After original image is decomposed using three layer wavelet transformation

the lattice vector quantization is used to construct the embedding strategy

in which coarse and detail watermark sequences are embedded into coarse and detail coefficients of original image

and the extracting strategy without need original image.To enhance security of the watermark

chaotic sequence is used to modulate the watermark.Experiment results have demonstrated that the proposed algorithm is more robust against J PEG compression and additive white gaussian noise than other similar watermarking algorithm

while the watermarked images have better quality.The recovered watermark image has good quality even under J PEG compression with a quality factor of 30.