In this paper, a dynamic stochastic resonance (DSR) based watermark detection technique in discrete wavelet transform (DWT) domain is presented. Pseudo random bit sequence having certain seed value is considered as a watermark. Watermark embedding is done by embedding random bits in spread-spectrum fashion to the significant DWT coefficients. Watermark detection is quantitatively characterized by the value of correlation. The performance of watermark detection is improved by DSR which is an iterative process that utilizes the internal noise present in the image or external noise which is added during attacks. Even under various noise attacks, geometrical distortions, image enhancement and compression attacks, the DSR-based random bits detection is observed to give noteworthy improvement over existing watermark detection techniques. DSR-based technique is also found to give better detection performance when compared with the suprathreshold stochastic resonance-based detection technique. © 2013 World Scientific Publishing Company.