Abstract: An improved version of EZW algorithm is presented．Unlike traditional EZW，the lowest frequency subband is coded separately from other highpass subbands，the SAQ process is improved by using multi-threshold， the embedded coding strategy is modified and the complex context modeling is adopted in our compression algorithm．The experiment results show that the new image compression scheme performs better than that of EZW and SPIHTin the aspects of recovery image quality and encoding/decoding rate．