We propose a novel image authentication and recovery scheme based on discrete wavelet transform (DWT). By using the property of a DWT multiresolution structure, we generate a semifragile watermark from low-frequency bands and embed the recovery information into the high-frequency bands based on the human visual system (HVS) approach. The image authentication system is able to locate precisely any malicious alteration made to the image and restore the altered or destroyed regions based on the recovery mechanism. Therefore, the requirements of ownership protection and tampering detection of digital right management (DRM) are met, and the legal usage of digital content is available. In addition, robustness to mild modifications like JPEG compression and channel additive white Gaussian noise (AWGN) is also achieved with high recovery image quality.