This Letter presents a novel VQ-based digital image watermarking method. By modifying the conventional GLA algorithm, a codeword-labeled codebook is first generated. Each input image block is then reconstructed by the nearest codeword whose label is equal to the watermark bit. The watermark extraction can be performed blindly. Simulation results show that the proposed method is robust to JPEG compression, vector quantization (VQ) compression and some spatial-domain processing operations.