Color embedding and recovery are investigated using a wavelet transform that enables color information to be hidden in gray images and then retrieved to recover color images. In a wavelet transform, high-frequency subbands are replaced by chrominance information from an image, yet the use of subbands can cause some loss of details and saturation. Therefore, this article proposes color embedding and recovery using a wavelet packet transform with a pseudorandom code to embed saturation information. In the color-to-gray process, the RGB is first converted to YCbCr color space to perform a two-level wavelet packet transform for a Y image. The CbCr color components are then embedded into the two subbands with the minimum amount of energy in the Y image, thereby minimizing the loss of details when compared to using a wavelet transform. In addition, to compensate the color saturation, the maximum and minimum values of the CbCr components from the original image are embedded into the diagonal-diagonal subband in a pseudorandom code form. In the recovery process, the saturation of the recovered image is compensated by applying the ratio of the original CbCr values to the extracted CbCr values. Experimental results show that the proposed method improves the color saturation of the recovered image when comparing the color difference and peak signal-to-noise values.