The Project “Key Based Data Embedding Technique in Image Steganogra- phy”, wass aimed at developing a key based approach for image steganography. Steganog- raphy is the art and science of writing hidden messages in such a way that no one, apart from the sender and intended recipient, suspects the existence of the message, a form of security through obscurity. In this project we have implemented a novel method of data embedding in images by making use of a key. The key is used for internally embedding data in the image. An additional level of security is added by using the Advanced Encryption Standard (AES) for encrypting the data before embedding it. This application has a wide array of uses. It can be used to store and transmit con- fidential data. It can be used for protection against data alteration. It can also be used for digital media distribution.