A reversible data hiding scheme based on residual histogram shifting for the compressed images of block truncation coding (BTC) is proposed. This scheme employs an iterative approach to embed the secret data into the compressed codes of BTC. In each round, the quantization levels are processed by the block-based prediction technique to generate the residual values. Then, the residual values are used to embed the secret data. Multiple rounds of the data embedding process can be executed to increase the hiding capacity of the proposed scheme. Experimental results reveal that the proposed scheme provides good image qualities of the embedded images. In addition, the hiding capacity of the proposed scheme is greater than that of the comparative scheme. Furthermore, the embedded compressed codes still follow the standard format of BTC after the proposed data embedding procedure is executed.