Methods and systems for robust watermark insertion and extraction for digital set-top boxes are disclosed and may include descrambling, detecting watermarking messages in a received video signal utilizing a watermark message parser, and immediately watermarking the descrambled video signal utilizing an embedded CPU. The embedded CPU may utilize code that may be signed by an authorized key, encrypted externally to the chip, decrypted, and stored in memory in a region off-limits to other processors. The video signal may be watermarked in a decompressed domain. The enabling of the watermarking may be verified utilizing a watchdog timer. The descriptors corresponding to the watermarking may be stored in memory that may be inaccessible by the main CPU. The watermark may comprise unique identifier data specific to the chip and a time stamp, and may be encrypted utilizing an on-chip combinatorial function.