Safeguarding creative content and intellectual property in a digital form has become increasingly difficult as technologies, such as the internet, broadband availability and mobile access advance. It has grown to be progressively easier to copy, modify and redistribute digital media, resulting in great declines in business profits. Digital watermarking is a technique which has been proposed as a possible solution to this problem. Digital Watermarking is a technology which is used to identify the creator, owner, distributor of a given video or image by embedding copyright marks into the digital content, hence digital watermarking is a powerful tool used to check the copy right violation. In this paper a robust watermarking technique based on DWT (Discrete Wavelet Transform) is presented. In this technique the insertion and extraction of the watermark in the grayscale image is found to be simpler than other transform techniques. This paper successfully explains the digital watermarking technique on digital images based on discrete wavelet transform by analyzing various values of PSNR’s and MSE’s..