A robust quantization-based gray watermarking algorithm based on discreet wavelet transform is proposed, which respectively inserts the original gray watermark image’s eight bit planes into the eight wavelet sub-bands of corresponding importance from the original cover image through odd-even quantization using proportionally decreasing quantization steps. Experimental results show that it has strong robustness towards brightness-and-contrast adjustment, median filter, Gaussian low-pass filter, adding Gaussian noise, adding salt&pepper noise and JPEG compression.