A method will be shown to incorporate digital watermarks in printed halftone images using stochastic screens. The watermark is not visible to the eye and introduces no loss in image quality. Although it cannot be seen, the watermark can be extracted at a later time with post processing. Watermarks of high contrast are incorporated in the image by varying the statistics of the stochastic screen. The watermark information can be made visible by comparing the relative changes in spatial correlation in the halftone texture of the image. Watermarking allows a printed image to be tested for the purposes of identifying the owner or the source of the image. Arbitrary customer information can be incorporated into the image, including variable information, such as the date or time of day. The technique is robust to copying of the printed image and the watermark can be detected in reproductions of the halftoned image.