This paper presents a new security system by combining cryptographic and steganographic Technique. The main idea behind the present work is to divide the participants into different security levels, determining which participant will be able to decrypt the secret image, and which participant will not be able to decrypt the secret image. A modified idea of traditional visual cryptography with pixel expansion will be introduced to encrypt the data. The hiding method is based on hiding the pixel of the encrypted secret image in a colored cover by altering the DCT coefficients of the cover image. Before the hiding process Arnold transformation is performed on the cover image. The results show that the stego-image is closed related to the original cover image, with good impressibility.