Due to improvements in imaging technologies and the ease with which digital content can be created and manipulated, there is need for the copyright protection of digital content. It is also essential to have techniques for authentication of the content as well as the owner. To this end, this paper proposes a robust and transparent scheme of watermarking that exploits the human visual systems' sensitivity to frequency, along with local image characteristics obtained from the spatial domain, improving upon the content based image watermarking scheme of Kay and Izquierdo [1]. We implement changes in this algorithm without much distortion to the image, while making it possible to extract the watermark by use of correlation. The underlying idea is generating a visual mask based on the human visual systems' perception of image content. This mask is used to embed a decimal sequence [2], [3], [4] while keeping its amplitude below the distortion sensitivity of the image pixel.We consider texture, luminance, corner and the edge information in the image to generate a mask that makes the addition of the watermark less perceptible to the human eye. The operation of embedding and extraction of the watermark is done in the frequency domain thereby providing robustness against common frequency-based attacks including image compression and filtering. We use decimal sequences for watermarking instead of pseudo random sequences, providing us with a greater flexibility in the choice of sequence. Weighted Peak Signal to Noise Ratio is used to evaluate the perceptual change between the original and the watermarked image.