With increasing use of mobile devices, photo sharing services are experiencing greater popularity. Aside from providing storage, photo sharing services enable bandwidth-efficient downloads to mobile devices by performing server-side image transformations (resizing, cropping). On the flip side, photo sharing services have raised privacy concerns such as leakage of photos to unauthorized viewers and the use of algorithmic recognition technologies by providers. To address these concerns, we propose a privacy-preserving photo encoding algorithm that extracts and encrypts a small, but significant, component of the photo, while preserving the remainder in a public, standards-compatible, part. These two components can be separately stored. This technique significantly reduces the accuracy of automated detection and recognition on the public part, while preserving the ability of the provider to perform server-side transformations to conserve download bandwidth usage. Our prototype privacy-preserving photo sharing system, P3, works with Facebook, and can be extended to other services as well. P3 requires no changes to existing services or mobile application software, and adds minimal photo storage overhead.