A method for image encryption is proposed to hide a secret image into another image. In this paper, a technique is presented to color transform the secret image and embed it into a target image(pre-selected from database), to disguise it and make it look like the target image. The secret image is earlier divided into small fragments called as tile images. Pixel color transformations of these tile images are performed. Thus, the output image looks similar to a randomly selected target image, in which the secret image is hidden by color transforming it to look like the target image. Such a technique is necessary to hide the secret image for transmitting it losslessly. The textual information related to the secret image is embedded into the secret image with the help of data hiding techniques before dividing it into fragments.