A watermarking scheme for audio and image files is proposed based on wavelet decomposition via zero assigned filter banks. Zero assigned filter banks are perfect reconstruction, conjugate quadrature mirror filter banks with assigned zeros in low pass and high pass filters. They correspond to a generalization of filter banks that yield Daubechies wavelets. The watermarking method consists of partitioning a given time or space signal into frames of fixed size, wavelet decomposing each frame via one of two filter banks with different assigned zeros, compressing a suitable set of coefficients in the wavelet decomposition, and reconstructing the signal from the compressed coefficients of frames. In effect, this method encodes the bit ‘0’ or ‘1’ in each frame depending on the filter bank that is used in the wavelet decomposition of that frame. The method is shown to be perceptually transparent and robust against channel noise as well as against various attacks to remove the watermark such as denoising, estimation, and compression. Moreover, the original signal is not needed for detection and the bandwidth requirement of the multiple authentication keys that are used in this method is very modest.