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Information hiding in JPEG2000 compressed images is investigated in this research. The challenges of covert communication in this state-of-the-art image codec are analyzed and a steganographic scheme is then proposed to reliably embed high-volume data into the JPEG2000 bit-stream. A special mode of JPEG2000 is employed, and its usage and functions are explained and justified. Experimental results are given to demonstrate the performance of the proposed algorithm.