Steganography is a science of security technique through invisible communication; hiding secret message into cover objects without any suspicion. Protection of the hidden information from an adversary is the main purpose of any steganography system even if the embedding method is obvious. In this paper, an effective image steganography system based on a least significant bit (LSB) algorithm and chaos is proposed. The proposed method contains a spatial domain technique in which the Logistic map is used for generating chaotic bitstream and bitwise XOR operation which is used to create control bit. Control bit determines whether the LSB of a specific pixel is changed or not according to the secret message. This provides direct manipulation over the pixels of the image with a very low precision hence enhances the system security. In this study, gray image is used as secret message and a larger scale image as cover image. Experimental results demonstrate that the proposed method is very efficient to detect LSB replacement in the algorithm. Moreover, the proposed algorithm is highly sensitive to the stego key parameters due to complex structure of chaos which provides high level of security in the whole system and effectively hides and detects the image information.