Image steganography and cryptography using three level password security is used for transferring sensitive data from one user to other user. The main aim of the project is to provide the users a secure way that helps the users to send and receive sensitive and important data from one user to other user in the form of image .The sensitive data is in the form of text. There is an authentication system that validates user for accessing the system only when they have input correct password. The project involves three levels of user authentication. In this sender will have to first go through all the three stages of authentication. After going through all the stages the senders text will be encrypted using the cryptography algorithm .These encrypted text will be hidden inside the image. After getting this image he can transfer/send this image by using email or simple message to the receiver. The receiver also has to go through all the three stages of authentication and use decrypt to decrypt the image and get the message or information hidden inside the image .