Abstract Smart Grid (SG) is the next generation power grid which provides flexibility, reliability, and efficiency in generating, controlling, and distributing the electricity. The SG provides two-way communication between supplier and consumers and sensitive information is communicated on the network. The attackers try to steal this information to attack the grids and consumers for their benefits. Some of the most popular smart grid attacks are the key-based attack, data-based attack, impersonation-based attack, physical based attack. To overcome these issues, the cryptography algorithms and steganography algorithms are used. The cryptography algorithms are scrambled the message and transform into another form. The cryptography algorithms are categorized into two types. These are an asymmetric and asymmetric cipher. In the symmetric cipher same key is used for encryption/ decryption purposes. The symmetric cipher is further divided into types known as a block cipher and stream cipher. In the block cipher, the message is divided into fixed chucks and the same key, rounds are applied on each chuck. In the stream cipher, the plaintext and key bitwise XOR operation are performed. On the other hand, in asymmetric algorithms, two different keys are known as the public and the private key is used for encryption/ decryption purposes. In this thesis, a two-layer security algorithm is designed using lightweight cryptography and steganography algorithm which provide confidentiality as well as authentication. In which three algorithms are hybrid which includes PICO, Genetic Algorithm, and LSB algorithm. Initially, the secret data is encrypted using a lightweight PICO algorithm and initialization vector key is generated using a lightweight genetic algorithm. Further, the encrypted data is hidden in the image using the LSB algorithm. The proposed technique simulation results show that the proposed technique consume less memory, provide high avalanche effect and embedding capacity.