Researches on communication security not only include study of cryptography, but also include that on channel security, the essence of which is to hide existence of information. Information steganography is important branch in information hiding field and technical approach to achieve steganography communication. Based on thoroughly analysis and research on information hiding and steganography techniques, the paper gave the model of information steganography system and designed a steganography system based on channel encoding. The system achieves embedment and extraction of steganography with bit replacement method based on pseudo-random sequence, so as to improve the security of system.