In this paper, we propose a reversible visible watermarking algorithm to satisfy a new application scenario where the visible watermark serves as a tag or ownership identifier, but can be completely removed to resume the original image data. It includes two procedures: data hiding and visible watermark embedding. In order to losslessly recover both the watermark-covered and nonwatermark-covered image contents at the receiver end, the payload consists of two reconstruction data packets, one for recovering the watermark-covered region, and the other for the nonwatermark-covered region. The data hiding technique reversibly hides the payload in the image region not covered by the visible watermark. To satisfy the requirements of large capacity and high image quality, our hiding technique is based on data compression and uses a payload-adaptive scheme. It further adopts error diffusion for improving subjective image quality and arithmetic compression using a character-based model for increasing computational efficiency. The visible watermark is securely embedded based on a user-key-controlled embedding mechanism. The data hiding and the visible watermark embedding procedures are integrated into a secure watermarking system by a specially designed user key