Abstract: For the transmission security of digital image, a novel bit-level image encryption algorithm is proposed by using a four dimensional (4D) hyper-chaotic system. Firstly, a pseudo-random binary sequence with good performance is obtained by classifying the chaotic sequences generated from the hyper-chaotic system. Then, the plain-image is decomposed into 8 bit-planes, the higher 3 and lower 5 bit-planes are shuffled separately by using circular shift of their rows and columns, and the resulting bit-planes are further embedded into four carrier matrices generated from the pseudo-random sequences. The preliminary cipher-image is obtained by performing exclusive-OR operation on the four carrier matrices. Finally, a linear pixel diffusion in two directions is performed on the preliminary cipher-image by using the diffusion matrix also generated from the binary sequence, after which the final encrypted image is obtained. Experiments and result analysis demonstrate that the algorithm has a high security with large key space and can resist common attacks including brute-force, statistical and differential analysis, etc. Furthermore, it also has a good efficiency.