With the fast progression of data exchange in electronic way, information security is becoming more important in data storage and transmission. This paper's main purpose is to research how to encrypt image by space-bit-exchange scheme (SBES). Based on analyzing traditional bit operation of individual pixels image encryption method, this paper proposed a new encryption algorithm. The new encryption algorithm combined with SBES and chaotic sequence. Firstly, use Logistic chaotic sequence to shuffle the positions of image pixels, then transform it into a binary matrix, and permute the matrix at bit-level by the scrambling mapping generated by SBES. Secondly, use another Logistic chaotic sequence rearrangement of the positions of the current image pixels. In this way, the proposed algorithm transforms drastically the statistical characteristic of original image information, so, it increases the difficulty of an unauthorized individual to break the encryption. The simulation results and the performance analysis show that the algorithm has large secret-key space, high security, fast encryption speed and strong robustness, and is suitable for practical use to protect the security of digital image information over the Internet.