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This letter proposes an improved version of Zhang's reversible data hiding method in encrypted images. The original work partitions an encrypted image into blocks, and each block carries one bit by flipping three LSBs of a set of pre-defined pixels. The data extraction and image recovery can be achieved by examining the block smoothness. Zhang's work did not fully exploit the pixels in calculating the smoothness of each block and did not consider the pixel correlations in the border of neighboring blocks. These two issues could reduce the correctness of data extraction. This letter adopts a better scheme for measuring the smoothness of blocks, and uses the side-match scheme to further decrease the error rate of extracted-bits. The experimental results reveal that the proposed method offers better performance over Zhang's work. For example, when the block size is set to 8 8, the error rate of the Lena image of the proposed method is 0. 34%, which is significantly lower than 1.21% of Zhang's work.