An image authentication and tampering localization technique based on a wavelet-based digital watermarking procedure [Opt. Express 3(12), 491-496 (1998)] is proposed. To determine whether a given watermarked image has been tampered with or not, the similarity between the extracted and embedded watermarks is measured. If the similarity is less than a threshold value, the proposed sequential watermark alignment based on a coefficient stamping (SWACS) scheme is used to determine the modified wavelet coefficients corresponding to the tampered region. Then, the morphological region growing and subband duplication (MRGSD) scheme are used to include neighboring wavelet coefficients and then duplicate the wavelet coefficients in other subbands. The experimental results show that the proposed SWACS and MRGSD schemes can efficiently identify different types of image tampering. Moreover, the detection performance of the proposed system on various sizes of the watermark and tampered region is also evaluated.