This paper proposes an image steganographic approach using the principle of pixel value differencing (PVD) and modulo operation (MO). The major contributions of the proposed approach are: (i) increase in peak signal-to-noise ratio (PSNR), (ii) increase in hiding capacity, and (iii) avoidance of fall off boundary problem (FOBP). At first, the image is partitioned into non-overlapping blocks consisting of three consecutive pixels. Then, the secret data is embedded in a block using two phases, (i) pixel difference modulo operation (PDMO) phase, and (ii) average PVD (APVD) readjustment phase. In the first phase, the difference between two consecutive pixels of a block is found and using an adaptive range table and modulo operation the secret data are embedded. In the second phase, the average of the first two stego-pixels of the block and the third pixel is considered for data embedding using PVD approach. The result of the proposed approach has been compared with existing approaches and found to be improved.