Abstract: An image compression method is provided which uses a wavelet transform technique to generate transform coefficients relating to an input image. Furthermore, the method generates and encodes an efficient tree structure of the transform coefficients by performing the following steps. First, transform coefficients are obtained by transforming an input image in accordance with the wavelet transforming technique. Then, a quantizing interval which minimizes quantization errors is determined for a predetermined step size and is determined according to statistical characteristics of the input image. Then, a simple tree structure is generated based on the transform coefficients, and such tree structure is modified by using statistical characteristics of the transform coefficients to produce a monotonically decreasing tree structure. The resultant tree structure is modified by limiting a maximum height difference between parent nodes and child nodes of the tree structure to produce the tree list.