A new reversible data hiding algorithm for digital images is proposed in this paper. A single key parameter is derived in the algorithm during the hiding process. This parameter must be transferred to extract data. A 3 × 3 window slides over the cover image by one pixel unit, and one bit can be embedded at each position of the window. Thus, the ideal maximum hiding capacity is equal to the number of pixels in the image. As a result, significant increases in hiding capacity and better visual quality of message-hidden images may be achieved. The proposed algorithm is verified with simulations.