Pixel difference range mismatch at sender and receiver is a major problem with pixel value differencing (PVD) steganography techniques. This paper proposes a new steganography technique combining modulus function PVD (MFPVD) and least significant bit (LSB) substitution to address the range mismatch problem. It uses 2×3 size pixel blocks to utilize the edges in five directions. The two LSBs of all the pixels of the block form the lower bit plane block. It is also known as remainder block. Similarly, the six most significant bits (MSBs) of all the pixels of the block form the higher bit plane block. It is also known as quotient block. The quotient block is formed by applying quotient division on all the pixels of the pixel block. Similarly, the remainder block is formed by applying remainder division on all the pixels of the pixel block. MFPVD is applied on the quotient block. The central quotient in the quotient block is considered as reference value and five difference values with five neighboring quotients are calculated. Based on the average of these five difference values, the hiding capacity in all the five directions is decided. The central remainder value in the remainder block acts as an indicator to represent the number of bits hidden in each of these five quotients, so that data extraction can be done successfully. In remaining five remainders LSB substitution is applied. The experimental results prove that there are no step effects in pixel difference histograms of stego-images. It means that the pixel difference histogram (PDH) analysis cannot detect this proposed technique. Further, it is also justified that the proposed technique achieves higher hiding capacity as compared to the existing techniques without compromising the peak signal-to-noise ratio (PSNR).