The work aims to design an encryption algorithm to solve the problem of poor anti-cracking performance induced by the sequence with iterative periodicity and one-way diffusion mechanism to scramble the pixels in current image encryption algorithm. An image encryption algorithm based on bidirectional correlation diffusion and nonlinear S box was designed. Through hash scheme, a key related to the initial image content was formed. Based on the two-dimensional hybrid chaotic function, the position crossover rule was designed with sub-keys to scramble the pixels of the plaintext. A 16×16 nonlinearity S box was formed based on the linear fractional transformation and the chaotic random array. The forward diffusion mechanism and cyclic forward shift mechanism of S-Box were defined to complete the forward encryption of the scrambled image. Finally, the initial conditions of the hybrid chaotic system were updated to construct the reverse diffusion mechanism for encrypting the forward cipher in reverse direction. The test data showed that compared with the existing chaotic encryption schemes, the proposed scheme had more advantages in security and efficiency, in which the time consumption was only 0.59 s, and the stable NPCR and UACI value was up to 99.74% and 33.69%, respectively. The proposed encryption scheme can resist external attacks in the network and fully protect the authenticity of image content.