Data hiding is an important branch of information security. Imperceptibility and Hiding Capacity are very important aspects for efficient secret communication. It is necessary to increase hiding capacity for JPEG2000 baseline system because available redundancy is very limited. In this book Redundancy Evaluation method is used for increasing hiding capacity. This method determines embedding depth adaptively for increasing hiding capacity. Large quantity of data is embedded into bitplanes, but at the cost of slightly change in Peak Signal to Noise Ratio (PSNR). This method easily implemented in JPEG2000 compression encoder and produced stego stream decoded normally at decoder. Simulation result shows that this method is secure and increases hiding capacity.