Steganography is the art and science of embedding hidden messages in a carrier medium such that no one apart from the sender and intended recipient even realizes that there is a hidden message. Mediums can include image, video and audio. The main goal of steganography is to maintain secret communication between two parties. There are many techniques available to achieve steganography. This study provides a robust and secure image steganography method to conceal secret image in digital cover image without incurring any perceptual distortion. The technique is based on Integer Wavelet Transform (IWT) and Particle Swarm Optimization (PSO) in transform domain. The transform domain is employed to increase the robustness of the image steganography method. Integer wavelet transform evades the floating point precision problems of the wavelet filters. To achieve high security, an encryption mechanism utilizing PSO is proposed. The secret message to be transmitted is normalized and then embedded into the cover image using IWT and the key generated by PSO. The proposed method is tested on various cover and secret images. The experimental results substantiate that PSO in IWT domain can improve the quality of stego image effectively without any compromise in histogram and statistical analysis. The proposed method also maintains good perceptual quality in Stego image and greater security.