Abstract-Most of the steganography techniques, based on pixel value difference, use the difference between the pixel values to hide the information. In this paper, an algorithm is proposed which combines the LSB and PVD steganography techniques to provide high data hiding capacity with acceptable stego image quality. Instead of using the original difference to hide the information, the difference is revised before it is used for hiding the information. This introduces an additional layer of security for the secret information. The algorithm divides the cover image in the blocks of 2 3 pixels. One of the pixels in the block is used as common pixel, which forms five pixel pairs with remaining five pixels in the block. The algorithm hides three secret bits in the common pixel using the LSB substitution method and then use the PVD based approach to hide data in five pixel pairs in each block. The algorithm determines the average (N) of the number of bits that can be hidden in the block. If the difference value allows M-bits to be hidden in the pair, then bits ≤ N are hidden in that pair. The result shows that the algorithm provides higher hiding capacity with better PSNR values as compared to other methods investigated in this study.