In this work, an alternative version to the stream cipher Grain-128 and an image encryption technique have been proposed. First, the new design is keep the same linear feedback shift register (LFSR) and nonlinear feedback shift register (NLFSR) which are used in Grain-128. The filtering function h of nine variables used in the Grain-128 is replaced by a Boolean function F on fourteen variables. The Boolean function, F is chosen to be balanced, has a correlation immune of order three, has algebraic degree 4 and has nonlinearity 7936. The proposed cipher is implemented to encrypt and decrypt images. The implementation was carried out using Matlab 7.5 platform. The security evaluation of the proposed cipher is presented and compared with others designs. The analysis of the proposed scheme shows superior performance in comparison with previouse designs, and the cipher is secure way for digital data encryption and transmission. The proposed cipher and neural network is combined to build a random number generator for cryptographic applications.