There have been a large number of methods proposed for encrypting images by shared key encryption mechanisms. All the existing techniques are applicable to primarily non-compressed images. However, most imaging applications including digital photography, archiving, and internet communications nowadays use images in the JPEG domain. Application of the existing shared key cryptographic schemes for these images requires conversion back into spatial domain. In this paper we propose a shared key algorithm that works directly in the JPEG domain, thus enabling shared key image encryption for a variety of applications. The scheme directly works on the quantized DCT coefficient domain and the resulting noise-like shares are also stored in the JPEG format. The decryption process is lossless. Our experiments indicate that each share image is approximately the same size as the original JPEG retaining the storage advantage provided by JPEG.