In digital world, security is one of the important challenging issues. Data hiding is one of the ways out. Covert communication is possible with data hiding. Steganography technique is one of the useful data hiding method, the secret is hided with the help of cover so that the third party cannot identify. Data may be in the form of text, image, audio/video. In this paper, a novel image steganography algorithm based on modulus and polynomial theory is proposed for data hiding. In proposed method image is taken as data, both secret and cover images are reconstructed at the receiver side by the authorized person without any damage hence this method satisfies the reversibility property. Proposed method gives high embedding capacity, good quality with a PSNR of 64.45dB compared with existing techniques.