Based on the ZU Chongzhi (ZUC) algorithm, this study designs and implements a reversible watermarking algorithm for separable encrypted images. In the algorithm, the content owner first marks the image to produce a position map and then runs the ZUC encryption algorithm to encrypt the original image. After the watermark embedder obtains the encrypted image, the watermark information is embedded into the second most significant bit or the most significant bit position of the selected pixels according to the position map. Through the encryption key and the embedding key, the receiver can get the directly decrypted image, watermark information, and the recovered image. The ZUC algorithm is adopted to encrypt and decrypt the image to ensure the security of the algorithm. The image was marked before the watermark information is embedded in the selected positions. The receiver employs an adaptive difference algorithm based on the correlation between adjacent pixels to extract watermarks and restore the image, ensuring the quality of the recovered original image and the directly decrypted image. Experiments show that the proposed algorithm has high security and achieves a separable effect. At the same time, the recovered original image and the directly decrypted image also have high quality.