Abstract: The image is conventionally segmented into nonoverlapping 8x8 blocks, a discrete cosine transform (DCT) is applied, then the DCT coefficients are rearranged into 64 subbands in the order of block's position, for example, all DC coefficients with lowest frequency are contained in the upper left subband. In order to exploit effectively the strong correlation of DCT coefficients in the neighbor blocks, the bit-planes of the coefficients are encoded using context-based arithmetic coding algorithm. In addition, the use of bit-plane coding ensures the progressive transmission of code-stream, namely embedded encoding. Experiment result shows that embedded discrete cosine transform (EDCT) is a simple and efficient image compression algorithm.