Aiming at solving the problem that some image encryption algorithms with the permutation-diffusion structure have low degree of encryption, this paper presents a new image encryption method. In the scrambling stage, firstly global scrambling uses gray code transformation, then scrambles pixel among row and column by chaos sequence. Diffusion part adopts the forward and reverse exclusive OR operation. The experimental results show that the proposed algorithm enhances the security of the cipher-image, key sensitivity, and increases the size of the key space, at the same time it can resist the statistical analysis, brute force attack.