This paper presents a novel watermarking scheme based on multi-band wavelet. Different from many other watermarking schemes, in which the watermark detection threshold is chosen empirically, the false positive rate of the proposed watermarking scheme can be calculated analytically so that watermark detection threshold can be chosen based solely on the targeted false positive. Compared with conventional watermarking schemes implemented in two-band wavelet domain, by incorporating the principal component analysis (PCA) technique the proposed blind watermarking in the multi-band wavelet domain can achieve higher perceptual transparency and stronger robustness. Specifically, the developed watermarking scheme can successfully resist common signal processing such as JPEG compression with quality factor as low as 15, and some geometric distortions such as cropping (cropped by 50%). In addition, the proposed multi-band wavelet based watermarking scheme can be parameterized, thus resulting in more security. That is, an attacker may not be able to detect the embedded watermark if the attacker does not know the parameter.