Abstract: A new dequantization scheme for DCT-based transform coding, such as JPEG, MPEG and H.26x, is disclosed. The new approach drastically reduces blocking artifacts without smoothing the decoded image. Most discrete cosine transform (DCT) based video coding suffers from blocking artifacts where boundaries of 8×8 DCT blocks become visible on decoded images. The blocking artifacts become more prominent as the bit rate is lowered. In the present invention, a new dequantization technique is disclosed for discrete cosine transform (DCT) based encoding to sharply reduce the blocking artifacts. The dequantization scheme of the present invention sharply reduces blocking artifacts in decoded images through regularization. The performance comparison with the standard JPEG as well as MPEG and H.26x decoding shows visual improvements as well as numerical improvements in terms of the peak-signal-to-noise ratio (PSNR) and the blockiness measure (BM) to be defined.