A system for hiding secret data in halftone images is disclosed. The system includes an image input module, a halftoning processing module and an image output module. The image input module reads an original image data and a secret image data. The halftoning processing module is coupled to the image input module and receives the original image data and the secret image data, performs a first error diffusion process to the original image to generate a first halftone image and performs a second error diffusion process to the original image data and the secret image data to generate a second halftone image. The image output image module is coupled to the halftoning processing module and outputs the first halftone image and the second halftone image, wherein the second error diffusion process comprises adding or subtracting a variable noise strength to or from each pixel of the secret image.