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Information security is a huge trending topic in recent year. Many technique and algorithm were designed and developed to achieve the security of information and/or network across the world. Cryptography is one of the most common tools to provide such security. Nevertheless, steganography also provide a good security by hiding data within a media in a way that an attacker can't sense the presence of the secret data. Compression don't normally imply any security , however , it messes up the original encoding of the data and reduces its size by a measureable amount which makes it perfect for hiding .In this paper a system was proposed where a secret image is compressed before encryption and hiding. JPEG algorithm was used for the compressing, while at the encryption stage RC4 algorithm was used due to its fast processing speed. LSB (Least Significant Bit) technique then applied to hide the secret data within the cover image.