A novel data hiding algorithm with prediction mode modulating for H.264video is proposed.Secret data is embedded by modifying the intra prediction modes of the qualified intra 4×4lum a blocks during the processes of intra prediction. This modulation is based on the mapping rules formed by the dominant edge streng th of host 4×4luma blocks,in order to avoid the fast increasing of the video s tream′s bit rate.At the same time,by utiliz ing the matrix coding,four watermark bits are hidden by quantifying one intra-4×4block′s mode.The detection of hidden informati on merely requires to decode the intra prediction modes from bit stream rather than decode the whole video.Experimental results show that the proposed method can improve the capacity of hidden information and ensure the quality of video,also avoid t he rapid growth of the bit rate effectively.