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Abstract: Nowadays, most multimedia is stored in compressed bit stream format to save the storage space or transmission time. This study proposes a novel technique for embedding flexible amounts of data in the bit map of the improved Ordered Dither Block Truncation Coding (ODBTC) image, where the ordered dithering is used to dither the quantized BTC image to avoid the annoying false contour and blocking effect inherently existed in BTC image. Moreover, the LUT strategy is also used to significantly reduce the complexity. The cell averaging and the second round of dithering are employed as the key steps in locating the embedded information bits. Experimental results demonstrate that an objective good quality image with flexible capacity and reasonable complexity is obtained. Moreover, the correct decoding rate of 100% is maintained, and the original host ODBTC image can also be reconstructed in the decoder when needed, which significantly boosts the flexibility in image quality control. [Copyright &y& Elsevier]