A steganalysis system based on 2-D Markov chain of thresholded prediction-error image is proposed in this paper. Image pixels are predicted with their neighboring pixels, and the prediction-error image is generated by subtracting the prediction value from the pixel value and then thresholded with a predefined threshold. The empirical transition matrixes of Markov chain along the horizontal, vertical and diagonal directions serve as features for steganalysis. Support vector machines (SVM) are utilized as classifier. The effectiveness of the proposed system has been demonstrated by extensive experimental investigation. The detection rate for Cox et al.'s non-blind spread spectrum (SS) data hiding method, Piva et al.'s blind SS method, and a generic QIM method (as embedding data rate being 0.1 bpp (bits per pixel)) are all above 90% over an image database consisting of approximately 4000 images. For generic LSB method (with various embedding data rates), our steganalysis system achieves a detection rate above 85% as the embedding data rate is 0.1 bpp and above.