Digital watermarking is an effective method to provide copyright protection for digital media. A blind image- adaptive watermarking algorithm based on DCT domain is presented. The algorithm selects adaptively the step size of quantization to embed the watermark bits by modifying DC components via the human visual system model and local characteristics of image; at the same time some AC components of the blocks with less perceptual capacity are also modified to embed the same watermark bits by using quantization. Thus the relation between robustness and imperceptibility can be well balanced. The algorithm recovers the watermark without any reference to the original image. Compared with the similar algorithm reported in the literature, this method can give better image quality and is better robust against noise and commonly used image processing techniques.