In this paper, a robust and efficient watermarking algorithm is proposed for copyright protection of digital images. The proposed algorithm can also be extended to video sequences. Based on Ho et al.'s image-in-image watermarking algorithm A.T.S. Ho, et al. (2002), the proposed algorithm uses an integer discrete cosine transform (IntDCT) (2003). It is based on the IntDCT transform used in the state-of-the-art video compression standard H.264 (2002), rather than the conventional DCT used in the prior video standards. The most significant advantage of this transform is that it is free from any floating-point or fixed-point multiplication required by the original DCT and all operations can be carried out with integer arithmetic, without loss of accuracy. The proposed algorithm can embed a small image such as a company's trademark into the original cover images. The algorithm's performance is evaluated using StirMark 4.0. Experimental results show that this proposed algorithm can survive attacks such as scaling, additive noise, line removal as well as JPEG compression. The simplicity of the integer DCT transform also offers a significant advantage in shorter processing time and ease of hardware implementation than commonly used DCT techniques.