Seamlessly integrating image compression technique and secret data hiding technique into a single procedure for security and efficient data transmission is a novel research issue in modern, decentralized digital communication environments. The first joint data hiding and compression (JDHC) scheme on block truncation coding (BTC) compression domain is presented in this paper. In the compressing and embedding procedure, for the complex blocks, modified block truncation coding (MBTC) is utilized to embed secret data and compress blocks simultaneously, while further controlling the visual distortion that is caused during data embedding. For the smooth blocks, according to the current embedding bit, either image inpainting or block search order coding (BSOC) is used to embed secret data and compress blocks simultaneously with maintaining acceptable compression performance. According to the image compression codes that are provided as output, image decompression and secret bits extraction procedures can be conducted simultaneously. Experimental results indicate that outstanding compression bit rate can be achieved by the proposed JDHC scheme with satisfactory visual quality and hiding capacity. INDEX TERMS Data hiding, image compression, MBTC, BSOC, image inpainting.