In this work we propose a new domain for digital watermarking. The proposed domain is the joint time-frequency cells of the Wigner distribution of the image. This domain provides an expanded, richer environment for watermark embedding. Watermark is placed in selected time-frequency cells of Wigner distribution. An inverse mapping then generates the watermarked signal. It is recognized that this approach is similar to time-frequency filtering problem. Since the watermarked Wigner may no longer be an admissible distribution any longer, the algorithm estimates a signal whose Wigner distribution is closest to the desired watermarked distribution. Selecting watermarkable time-frequency cells is similar, but not the same, problem encountered in DCT watermarking. For watermarking that is robust to JPEG, only those cells whose time-frequency signatures are relatively untouched by compression are selected. As a result, watermark remains detectable across all JPEG quality factors.