We present a reversible watermarking scheme which achieves perfect restoration of both the embedded watermark and the original image during extraction. The proposed scheme embeds data by modifying those integer DCT coefficients with peak amplitudes in each coefficient histogram. The integer DCT performed over the original image is a lossless 8/spl times/8 block transform with high energy concentrating ability, which guarantees reversibility and high capacity/distortion ratio for the proposed watermarking scheme. In addition, this scheme provides a wide quality (PSNR) range from around 40 dB to 60 dB for the watermarked image, and an inherent fine adjustment capability for the quality (PSNR). Some experimental results are presented to demonstrate the high performance of our scheme in terms of capacity and the quality of the watermarked image.