In this paper, a hierarchical encrypted image watermarking technique based on a fractional domain random phase encoding method is proposed. Multiple watermarks encrypted at multiple levels are multiplexed in the fractional Fourier domain and added into a host image. The watermarks are encrypted by the conventional fractional Fourier domain double random phase encoding scheme. The proposed method offers extra security. The invisible watermark is recovered by applying correct random phase masks along with the correct fractional orders. The metric peak signal-to-noise ratio is used to evaluate the visual quality of the watermarked image. To check the robustness of the proposed technique, the effects of image processing operations, such as cropping, mean filtering, median filtering, and noise, are also studied. For watermark authentication, the correlation value is calculated between the original and retrieved watermarks. Simulation results are presented in support of the proposed idea.