Digital representation of data has many advantages over analogue formats; however these advantages present serious problems of copyright violation, illegal copying and distribution. Consequently, protection for multimedia distribution against piracy is needed. A part of the solution is to use a watermark indicating content owner or distribution route, which is transparently and robustly embedded into the material. The thesis presents work addressing specific issues of concern for satellite images. These include complexity of implementation and reversibility of the insertion as well as the obvious robustness issues. Methods have been defined and tested to reduce the complexity of finding appropriate insertion positions in DCT-based watermarking. However, to further reduce the implementation complexity, the final selected method is based on the fast Hadamard transform which has been shown to be suitable and robust. In addition, using predefined positions of insertion, the reversibility property is achieved. Finally, the hardware implementation of the above method is described; the simulations have proven that the hardware design has delivered the same functionality as the software algorithm. Most important is that we have demonstrated the feasibility of performing real time watermarking onboard satellites, using reconfigurable logic devices. The first hardware watermarking design for onboard micro satellite imaging system is presented. The design can be run at 50 Megapixels/second which will ensure the real time processing of the watermarking process with accordance of the process flow of the data handling payload.