This paper proposes an improved method of reversible data hiding with increased capacity. The conventional method determines whether to embed a data bit in an image block according to the statistics of pixels in that block. Some images have pixel statistics that are inadequate for data hiding, and seldom or never have data embedded in them. The proposed method modulates the statistics invertibility to overcome such disadvantages, and is also able to improve the quality of the image containing the hidden data using block-adaptive modulation. Simulationresults show the effectiveness of the proposed method.