This paper presents a novel non-blind watermarking algorithm using contourlet transform. The contourlet transform is preferred for watermarking because of its ability to capture the directional edges and contours superior to other transforms such as cosine transform, wavelet transform, etc. Watermark is encrypted and embedded into high frequency directional subband, which is obtained by performing contourlet decomposition on the host image. The watermarked image has very good perceptual transparency. Watermark extraction algorithm is a non-blind process, which makes use of original image as reference for retrieving the watermark. This algorithm is robust against cropping attacks and geometric attacks and also has superior Peak Signal to Noise Ratio (PSNR) for the watermarked image.