To obtain a larger embedding capacity and better imperceptible stego-images, we propose a new image steganography algorithm using wavelet contrast and modulus operation based on the visual characteristic that humans are not sensitive to rapid changing areas and dark areas. Firstly, the carrier image is divided into blocks with a fixed size and the wavelet contrast is calculated. Secondly, the embedding depth of each block is determined according to the wavelet contrast. Finally, secrete data is embedded into the image through modulus operation. Experimental results show that the proposed approach provides both larger embedding capacity and higher image quality.