In this paper, we propose a reversible data hiding scheme that exploits the centroid formula. Specifically, we use it to define a centroid boundary vector and a centroid state codebook CSCB. Initially, our centroid boundary vectors and CSCBs are the same as the side match vector quantization (SMVQ) algorithm’s boundary vectors and state codebooks SCBs. For each VQ index, the proposed scheme exploits the centroid formula to update its centroid boundary vector and the corresponding CSCB. The updating is coupled with a heuristic to select the best state codebook (i.e., either SCB or CSCB) for each VQ index, which generates a highly compressible distribution of index values. Our experimental results show that the proposed scheme can embed n = 1, 2, 3, and 4 bit per index (bpi) at bit rates of 0.332, 0.394, 0.457, and 0.519 bit per pixel (bpp), respectively, for the main codebook size N = 256. These results confirm that the proposed scheme improves recent VQ and SMVQ based reversible data hiding schemes.