A method and apparatus for watermarking digital content and a data extraction method are disclosed. The digital content watermarking method includes: generating private and public keys corresponding to the user terminal; generating watermark data containing user identity information corresponding to the user terminal and user details associated with the watermark data; generating encrypted data by encrypting the watermark data and the user details with the private key; transmitting the watermark data, the encrypted data, and the public key to a server; receiving digital content when authorized by the server; and watermarking the digital content with the watermark data.