A digital watermarking image compression method based on symmetrical encryption algorithm is proposed in this study. First, the original image and scrambled watermarking image are processed by wavelet transform, and then the watermarking image processed by the Arnold replacement method is transformed into a meaningless image in the time domain to achieve the effect of encryption. Watermarking is generated by embedding the watermarking image into the important coefficients of the wavelet transform. As an inverse process of watermarking embedding, watermarking extraction needs to be reconstructed by the wavelet transform. Finally, the watermarking is extracted from the inverse scrambled watermarking image, and a new symmetrically encrypted digital watermarking image is obtained. The compression method compresses the embedded digital watermarking image, so that the volume of the compressed watermarking image is greatly reduced when the visual difference is very small. The experimental results show that the watermarking image encrypted by this method not only has good transparency, but also has strong anti-brightness/contrast attack, anti-shearing, and anti-noise performance. When the volume of the compressed image is greatly reduced, the root mean square error and visual difference measurement of the watermarking image are very small.