In this paper, the authors propose a novel scheme of reversible data embedding in encrypted image. This paper presents a new method that combines cryptography and steganography technique for data hiding and safe image transmission purpose. In order to securely share a secrete image with other person, a content owner may encrypt the image before transmission. In the first phase, a content owner encrypts the original uncompressed image using an encryption key. Then a data hider may compress the least significant bits of the encrypted images using a data hiding key to create a sparse space to accommodate some additional data.