Abstract: A method and apparatus for visually lossless compression encoding and decoding is described. The present invention includes a method for compression of color image data directly from the CMYK color space into the compressed data matrix without the necessity of transforming the data into standard three matrix representation of the color data, typically RGB. The method also utilizes newly described stochastic wavelet transformations which transform the data in the horizontal and vertical direction prior to quantization of the coefficients. A encoding step then ensues to further compress the data of the color image. Decompression may be accomplished such that a high compression ratio is achieve without visual loss of any color data of the image.