A lot of data hiding methods have been developed as a mean of secret data communication. Accordingly, numerous techniques have been proposed in the name of either steganography or watermarking, which all belong to data hiding techniques in wide sense. In data hiding, the most common way is a target-based method which means that a specific target such as domain (frequency, time, or spatial) is pre-determined before developing a hiding method. In this paper, we are especially interested in developing a k-sslrcs data hiding method that can be generally applied to many common lossless compression applications. Among several approaches in data or image compression. LZW is a well-known technique. Since it refers to a dictionary storing single and their combined symbols, LZW is classified as a dictionary-based technique. So in this project LZW is used to compress the digital image. So that storage capacity of system can be increased and a new approach on image compression is done. Finally compression ratio is calculated for technique’s efficiency.