The purpose of image encryption is to protect content from unauthorized access. Image encryption is usually done by pixel scrambling and confusion, so process is possible to reverse only by knowing secret information. In this paper we introduce a new method for digital image encryption, based on a 2D cellular automaton and pixel separation. Novelty in the proposed method lies in the application of the balanced 2D cellular automata with extended Moore neighborhood separately on each level of pseudorandom key-image. This process extends key space several times when compared to the previous methods. Furthermore, pixel separation is introduced to define operation for each pixel of the source image. Thanks to pixel separation, decryption process is more difficult to conduct without knowing secret information. Moreover, encryption is robust against different statistical attacks and analysis, does not affect image quality and can cope with loss of encrypted image content
