A method is presented to hide data within an medical image for the real time application using the Integer Wavelength Transform (IWT) technique in the transform domain with the help of steganography. IWT is an image compression technique wherein the output is in the form of integers thus consuming less memory space. Steganography is done intelligently such that it is difficult for an adversary to detect the existence of a hidden message in the otherwise innocuous data. This united with integer wavelet transform allows high quality data hiding and image compression. To transmit many such images over a network, sometimes over low-capacity phone lines to remote sites, or to store large numbers of images over a long period of time as part of the medical records for patients, the need for image compression arises to alleviate these large demands for image data storage and transmission capacity. The secret information is hidden in cover image using IWT implementation which has been coded in C language to ensure easy realization in real-time applications. The PSNR and execution time for the different images using IWT technique have been computed. © 2014 IEEE.