A new secure image transmission technique is proposed, which transforms automatically a given large-volume secret image into a so-called secret-fragment-visible mosaic image of the same size. The mosaic image, which looks similar to an arbitrarily selected target image and may be used as a camouflage of the secret image, is yielded by dividing the secret image into fragments and transforming their color characteristics to be those of the corresponding blocks of the target image. Skillful techniques are designed to conduct the color transformation process so that the secret image may be recovered nearly losslessly. A scheme of handling the overflows/underflows in the converted pixels’ color values by recording the color differences in the untransformed color space is also proposed. The information required for recovering the secret image is embedded into the created mosaic image by a lossless data hiding scheme using a watermarking technique. Good experimental results show the feasibility of the proposed method.