We propose IMAGINATION (IMAge Generation for INternet AuthenticaTION), a system for the generation of attack-resistant, user-friendly, image-based CAPTCHAs. In our system, we produce controlled distortions on randomly chosen images and present them to the user for annotation from a given list of words. The distortions are performed in a way that satisfies the incongruous requirements of low perceptual degradation and high resistance to attack by content-based image retrieval systems. Word choices are carefully generated to avoid ambiguity as well as to avoid attacks based on the choices themselves. Preliminary results demonstrate the attack-resistance and user-friendliness of our system compared to text-based CAPTCHAs.