Image watermarking is a technology that enables copyright protection of images, but causes a deterioration of host image. The purpose of this paper is to suppress the quality degradation of the cover image. Our methods divides the image into similar nonoverlaped blocks for each pixel using the watershed segmentation, and embeds a watermark of spread sequence. This division narrows the range of pixel values in the block, so that a smaller watermark can be embedded. The embedding approach in the proposed method uses the smear transform. As a result, a watermarked image can be generated while suppressing the image quality deterioration.