The work proposes a light weight image encryption algorithms suitable for real time application. The paper presents an information hiding technique that utilizes lifting schemes to effectively hide information in color images. A successful information hiding should result in the extraction of the hidden data from the image with high degree of data integrity. Current trends favor using digital image files as the cover file to hide another digital file that contains the secret message or information. Different streams of digital media can be used as a cover stream for a secret message. Steganography is the art of writing secret messages so that only the sender and the intended recipient are aware of the hidden message. The paper introduces a method of secret message encoding that makes use of wavelets. Wavelets break down the stream into high and low frequency component parts called details and trends. Existing technique use DCT to compress the Stego image, here we introduce Discrete Wavelet transform to achieve the required quality of image. The lifting technique allows for variation in levels of transformation, selecting region of interest on cover image to be manipulated, type of wavelet transformation to be applied. Thus, the critical issues for high processing speed and low memory size can be eased also provides the secure communication under adjustable embedding capacity.