Using the local correlation of carrier images to embed secret data in MSBs is a popular scheme for reversible data hiding in encrypted images (RDHEI). However, most existing methods based on this scheme face challenges in achieving complete compression while ensuring security. In this study, an RDHEI method that uses a two-dimensional chaotic system and full bit-plane search (FBPS) is proposed. Specifically, the content owner provides cover images and employs a chaotic system to generate chaotic sequences for inter-block non-symmetrical permutation and intra-block diffusion. The special encryption method, combined with chaos, not only preserves the correlation of pixels within a block but also ensures an extremely high level of security. The FBPS technique is applied to detect all smooth bit planes, not limited to continuous MSBs. For data embedding, ‘0’ and ‘1’ are used to record all smooth and rough bit planes to achieve thorough compression. The results of the experiment show that our proposed method provides a high level of security and achieves 2.142 bit/pixel and 2.339 bit/pixel on the typical datasets BOSSbase (Break Our Steganographic System) and BOWS-2 (Break Our Watermarking System 2nd). Compared with the state-of-the-art methods, the embedding capacity has also been significantly improved.