The implementation of the digital communication system is important for the study, analysis,
test and development of the performance of the system, in this project we introduce two parts to carry out the implementation, the theoretical part and it is concerned with the study and analysis of the algorithms in source coding, channel coding and data security represented in cryptography and steganography. the second part is the MATLAB implementations, simulations and analysis, the adopted algorithms for the implementation are Huffman, BWT compression, Run-Length coding and decoding, for lossless source coding, BCH coding and decoding, for forward error correction, advanced encryption standard AES with 128-bit cipher key with second protection layer of steganography for data security, the performance was simulated and tested under the AWGN channel with M-PSK digital modulation.