In this paper, a reversible data-hiding scheme in encrypted, vector quantization (VQ) encoded images is proposed. During image encryption, VQ-encoded image, including codebook and index table, is encrypted by content owner with stream-cipher and permutation to protect the privacy of image contents. As for additional-data embedding, a baseline method is first proposed and its corresponding optimized method is then given. By grouping one high-occurrence index with one or multiple low-occurrence indices, a series of index groups are constructed. Thus, by modifying the high-occurrence index to the corresponding index within the same group according to the current to-be-embedded bits, data embedding can be realized. The optimal hiding capacity is obtained by optimizing the coefficient vector for different types of index groups. Separable operations of data extraction, image decryption, and recovery can be achieved on the receiver side based on the availability of the encryption and data-hiding keys. Experimental results show that our scheme can achieve high hiding capacity and satisfactory directly decrypted image quality and guarantee security and reversibility simultaneously.