Chaotic theory has been applied to image encryption as an effective and robust technique due to its unique properties. In this paper, we introduce a new combined chaotic system, which shows better chaotic behaviors than the traditional ones. Applying this chaotic system to image processing, a new image encryption algorithm is introduced based on the confusion and diffusion in encryption procedure. Experimental results show that the proposed algorithm has a higher security level and excellent performance in image encryption. © 2012 IEEE.