The objective of this project is to develop a method of image compression offering advantages over the more traditional vector-based algorithms (transform coding and vector quantization). It is expected that the blocking artifact can be eliminated and edge fidelity can be improved. Further, the multiresolution representation itself provides a solution to many imaging applications which need to handle the same image at different resolutions for display, printing or browsing, for example. This research could provide a technique for designing optimal filters for multiresolution coding; it is expected that optimal filters will be designed and applied to typical imagery. The algorithm could provide the basis for more effective commercial compression subsytems, critical to the success of electronic imaging in computer and consumer applications.