A new morphed steganographic algorithm is proposed in this paper. Image security is a challenging problem these days. Steganography is a method of hiding secret data in cover media. The Least Significant Bit is a standard Steganographic method that has some limitations. The limitations are less capacity to hide data, poor stego image quality, and imperceptibility. The proposed algorithm focuses on these limitations. The morphing concept is being used for image steganography to overcome these limitations. The PSNR and standard deviation are considered as a measure to improve stego image quality and morphed image selection, respectively. The stego keys are generated during the morphed steganographic embedding and extracting process. Stego keys are used to embed and extract the secret image. The experimental results, which are based on hiding capacity and PSNR, are presented in this paper. Our research contributes towards creating an improved steganographic method using image morphing. The experimental result indicates that the proposed algorithm achieves an increase in hiding capacity, stego image quality, and imperceptibility. The experimental results were compared with state of the art steganographic methods.