The rise in the use of internet, secure transmission of the data has become an utmost priority. Steganography makes the data invisible by hiding it in the multimedia such as image, audio or video file and thereby covering for its existence. In this project we use prediction error (PE) technique steganography and Least Significant Bit (LSB) substitution method to hide data in the image. As we do PE expansion method it can lead to expansion of pixels like it can lead to pixel value above 255. In order to solve this problem, we restricted the pixel values between 15 and 240.The PSNR was high at low threshold values. The hiding capacity increased with increase in threshold with a reasonable decrease in PSNR. There was 2dB difference then other methods because of high data hiding capacity. Also we have used knight’s tour for increasing the security of data hidden. In comparison to other methodology, this methodology proves to be better and more effective
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