In this paper, a technique for hiding the data of images using palette based approach with the concept of run length has been proposed. At the source, the image which is to be hidden (target image) is encoded within another image (cover image). Firstly, the cover image and the target image can be of any size which will be adjusted by our resize function thereby removing the size constraint. The final encrypted image (cover and target) image is sent over the network. This image is decoded at the receiver end. This approach is a palette based approach since both the image is initially quantized using the palette. The encoding of the target image at the sender end is done using the concept of run-length. © 2010 IEEE.