Due to highly increase of enhanced computer and communications between them and also dramatic increase in electronic media, security plays an important role for those organizations where the data is very much critical and important for them. As multimedia is the most popular data shared in the web so it is very much required for the protection over it through an advanced encryption technique so that no one can spoof into it. As now days many internet attackers are there who are very much interested in spoiling the data or stealing the data. It is because the older techniques such as conventional cryptology where a long bit of string are mainly difficult to memorize such a random string. It can easily attacked by using brute force attacked technique. Instead of using traditional cryptology techniques like voice, fingerprint test, retina test etc. it helps to uniquely identify the person and a secure method for stream cipher. Since multimedia data are transferred over open network so more security need to be given to the data.In this paper, we have used the idea of advanced secure wavelet transform and chaotic arithmetic coding. Here we have used the idea of chaotic coding that is the encryption of multimedia files and transmitting over a secured frequency that is the wavelet transform. It enhances the multimedia contents and it should not be compromised. Wavelet transform is a transform in which it is capable of providing the time and frequency information simultaneously, hence providing us a time-frequency representation of the signal. The idea here it gives a new kind of chaotic stream cipher where due to wavelet transmission the data is secured and don't get lost or we can say outsiders cannot view the data unless they know the wavelet transmission frequency and also the encryption arithmetic coding though which it is encrypted. A systematic study on how to strategically integrate different atomic operations to build a multimedia encryption technique. The paper also describes of how to generate an initial key or initial condition from the concept of chaotic arithmetic coding and thus encrypt or decrypt the multimedia data by using this function. The robustness and effectiveness of this new version of scheme is verified by its security strength and also with the comparison with its overall computational cost against the other techniques. The proposed system can guarantee its security and fastness without noticeable increase in encoded image size. © 2005 - 2013 JATIT & LLS. All rights reserved.