This paper presents a highly robust watermarking scheme for color images in spatial domain using block probability with a password authentication technique. There are two main phases; one is Invisible watermarking phase and other is the Password insertion phase inside the image. In the watermarking phase a binary watermark is permuted using a random numbers and converted to gray code, in which each bit of the binary encoded watermark is embedded by modifying the intensities of the 8 *8 blocks and finally inserted into the blue component of the original image. In the Password insertion phase a 16-bit binary key (password) is embedded in the original image along with the watermark. Extraction of the watermark is done by comparing the intensities of watermarked image with the original image. The same watermark has been embedded in four different positions to provide high robustness and it also secure, only the person with the correct password can extract the watermark and also the use of random number (32 *32) as a secret key intensifies the security of the information.