A watermark is an identifying image or pattern in paper that appears as various shades of lightness/darkness when viewed by transmitted light, caused by thickness or density variations in the paper. Watermarks have been used on postage stamps, currency, and other government documents to discourage counterfeiting. There are two main ways of producing watermarks in paper; the dandy roll process, and the more complex cylinder mould process.

Paper is a thin sheet material produced by mechanically or chemically processing cellulose fibres derived from wood, rags, grasses, or other vegetable sources in water, draining the water through a fine mesh leaving the fibre evenly distributed on the surface, followed by pressing and drying. Although paper was originally made in single sheets by hand, almost all is now made on large machines—some making reels 10 metres wide, running at 2,000 metres per minute and up to 600,000 tonnes a year. It is a versatile material with many uses, including printing, painting, graphics, signage, design, packaging, decorating, writing, and cleaning. It may also be used as filter paper, wallpaper, book endpaper, conservation paper, laminated worktops, toilet tissue, currency, and security paper, or in a number of industrial and construction processes.