Abstract: A system and method for performing image compression using multi-threshold wavelet coding (MTWC) which utilizes a separate initial quantization threshold for each subband generated by the wavelet transform, which substantially reduces the number of insignificant bits generated during the initial quantization steps. Further, the MTWC system chooses the order in which the subbands are encoded according to a preferred rate-distortion tradeoff in order to enhance the image fidelity. Moreover, the MTWC system utilizes a novel quantization sequence order in order to optimize the amount of error energy reduction in significant and refinement maps generated during the quantization step. Thus, the MTWC system provides a better bit rate-distortion tradeoff and performs faster than existing state-of-the-art wavelet coders.