The widespread use of server and desktop virtualization technologies increases the likelihood of unauthorized and uncontrolled distribution of virtual machine (VM) images that contain proprietary software. This paper attempts to address this issue using a platform-independent digital watermarking scheme applicable to a variety of VM images. The scheme embeds a watermark in the form of files in a VM image; the watermarked VM image is identified based on the embedded files. To reduce the possibility of discovery by an attacker, the names of the embedded files are very similar to the names of pre-existing files in the VM image. Experiments indicate that the approach is fast and accurate, with average turnaround times of 24.001 seconds and 7.549 seconds for watermark generation and detection, respectively.