Because of the facility of accessing and sharing digital images through the internet, digital images are often copied, edited and reused. Digital image watermarking is an approach to protect and manage digital images as intellectual property. The embedding of a natural watermark based on the properties of the human eye can be utilized to effectively hide a watermark image. This paper proposes a watermark embedding scheme based on the psychovisual threshold and edge entropy. The sensitivity of minor changes in DCT coefficients against JPEG quantization tables was investigated. A watermark embedding scheme was designed that offers good resistance against JPEG image compression. The proposed scheme was tested under different types of attacks. The experimental results indicated that the proposed scheme can achieve high imperceptibility and robustness against attacks. The watermark recovery process is also robust against attacks.