Digital image watermarking technique based on LSB Substitution and Hill Cipher is presented and examined in this paper. For better imperceptibility watermark is inserted in the spatial domain. Further the watermark is implanted in the Cover Image block having the highest entropy value. To improve the security of the watermark hill cipher encryption is used. Both subjective and objective image quality assessment technique has been used to evaluate the imperceptibility of the proposed scheme.Further, the perceptual perfection of the watermarked pictures accomplished in the proposed framework has been contrasted and some state-of-art watermarking strategies. Test results demonstrates that the displayed method is robust against different image processing attacks like Salt and Peppers, Gaussian filter attack, Median filter attacks, etc.