In the existing reversible watermarking algorithm based on mean-adjustable integer transform, there are following defects such as non-adaptive threshold selecting, incomplete location map building strategy which may lead to poor compression performance and compulsive partition strategy for embedded vectors which may lead to a failure embedding even if embedding capacity is enough. To address these problems, an iterative adaptive reversible image watermarking algorithm combined with mean-adjustable integer transform was proposed. Firstly, according to Peak Signal-to-Noise Ratio (PSNR) affected by the payload data size and integer vector, an iterative adaptive algorithm was used in selecting mean-adjustable offsets to balance the watermarking embedding capacity and the visual quality of embedded carrier; Secondly, based on the strategy that adjacent pixels have similar pixel values, a complete location map generating strategy was proposed to improve location map compression performance; Finally, to avoid failure embedding, the proposed reversible watermarking algorithm adopted hierarchical order embedding strategy to embed payload data in order from the first least significant bits to the third least significant bits. The experimental results show that the proposed algorithm has a big embedding capacity and does not need to preset threshold. Location map building strategy has a better performance in making location map data in smaller size and increasing the capacity indirectly compared with the reversible watermarking algorithm based on mean-adjustable integer transform, and the PSNR increases by 14.4% averagely in experimental sample.