In this paper, the authors propose a new algorithm to hide data inside image using steganography technique. The proposed algorithm uses binary codes and pixels inside an image. The zipped file is used before it is converted to binary codes to maximize the storage of data inside the image. By applying the proposed algorithm, a system called Steganography Imaging System (SIS) is developed. The system is then tested to see the viability of the proposed algorithm. Various sizes of data are stored inside the images and the PSNR (Peak signal-to-noise ratio) is also captured for each of the images tested. Based on the PSNR value of each images, the stego image has a higher PSNR value. Hence this new steganography algorithm is very efficient to hide the data inside the image.