Reversible data hiding aims at recovering exactly the cover image from the marked image after extracting the hidden data. Reversible data hiding with contrast enhancement proposed by Wu et al. achieved a good effect in improving visual quality with considerable embedding capacity while PSNR of the marked image is relatively low. In contrast, Prediction error based reversible data hiding does not reveal obvious change of visual quality while keeping high embedding capacity and PSNR. In this paper, we propose a novel reversible data hiding method with contrast enhancement based on the combination property of the above two methods.