What is disclosed is a novel system and method for encoding/decoding data in a cover contone image via halftone dot orientation modulation. Arrays of halftone threshold values are used to determine a desired orientation, e.g. 0/90°+/−45° for a given single data value of the original message to be embedded. Message data is embedded as a function of halftone dot orientation. Detection modeling of the print-scan process enables the determination of dot orientation from the image scan via statistically motivated image moments. A probabilistic model of the print-scan channel conditions received moments on input orientation. Density values of the received moments are used to determine dot orientation for each halftone cell. The embedded data is retrieved based on the determined orientations. The present method is applicable to areas of data embedding, document security, and the like.