To represent the image on a screen, several bits is used. Image compression a technique which is used to reduce the number of bits used for representation. Image compression helps in reducing the size of the image which results in less storage space and less cost of the transmission. The image is as compressed as the quality of the image is retained. In this paper, the image is compressed first and then the secret message is hidden in it using Tri-way Pixel Value Difference method. A neural network algorithm called Back Propagation Neural Network Algorithm is used for image compression. The benefit of using back propagation algorithm for using image compression is the vast increase in performance of the system as well as less convergence time for neural network training which not only maintain the quality of the image but also reduce the overall size of the image. This neural network method for image compression has shown a very promising result in image compression. After compression of the image, the secret message is embedded using Tri-way pixel Value Difference method which not only provides imperceptible stego image but also enlarges the capacity of the hidden secret information.

Artificial Neural Network, Steganography, Image Compression, Back Propagation Algorithm, Pixel-Value Differencing, Data Hiding

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