This paper proposed a high capacity two-phased method of reversible data hiding on dual steganographic images. The first phase calculates the difference values between adjacent grayscale pixels to generate a histogram and utilizes the histogram modification to embed data. The method of the first phase can embed 13~195 KB confident data for a 512×512 grayscale image while keeping a high PSNR of 52 dB for all nature images. The second phase generates two stego-images using the differences in blocks based on a four-quadrant magic matrix. The nature images of the second-phase method can carry a large amount of data (1.16~1.24 bit per pixel) while possessing a good visual quality (the PSNR of the stego-image versus the cover image is around 44.2 dB for all images). The proposed method compares the performance with the existing methods and is better than many of the existing algorithms.