With the proliferation of readily available image content, data hiding/watermarking has become a topic of considerable importance. In many applications, it is desirable to embed identifying data strings for authentication, or to embed contextual data that may be used for other purposes. It is also desirable that the image into which the data has been embedded be visually indistinguishable from the original. This paper presents a method in which psychovisual metrics are used in a wavelet based algorithm that can embed a set of bits into an image. The resulting image remains visually identical to the original. The algorithm can be used to embed very robust authentication data, or less robust data to be used for other purposes, where the robustness is a function of the number of bits to be embedded.