Abstract: An apparatus and method for image data compression performs a modified zero-tree coding on a range of absolute image values from the largest to a determined smaller absolute value, based upon file size or quality. If it is desired to maintain more detail in the image, then a vector quantizer codes the remaining values below this determined smaller value to zero, and lossless entropy coding is performed on the results of the two coding steps. The determined smaller value can be adjusted by examination of the histogram of the tree, or iteratively to meet a preselected compressed image size criterion or to meet a predefined level of image quality, as determined by any suitable metric. If the image to be compressed is in RGB color space, the apparatus converts the RGB image to a less redundant color space before commencing further processing.