Abstract: The application of spatial transformation to encryption of digital image is proposed, and the feasibility of using wavelet packet analysis to encrypting image is proved. The effects and phenomena from the inherent properties of wavelet packet analysis on encryption have been analyzed. It is pointed out that the algorithm is immune from attack of traditional cryptograph, and puts forward a new method of image encryption. With simple key, the encryption by wavelet packet will keep the file in high secrecy. But the hardware should be a little more complex.