Abstract: A lossless and near lossless image coder—LANIC is presented in this paper. In this method, the image is first partitioned into blocks. Then for each block, the edge detector automatically switches to DPCM coder or DCT coder. The edge blocks are coded by the DPCM coder that adopts a two level decorrelation scheme and a quartertree Rice coder. For non edge blocks, DCT, run length and variable length coding （VLC） are applied. The experimental results are as follows: Under lossless mode, LANIC significantly outperforms lossless JPEG and FELICS, and is a little better than CB9 and LOCO I; under near lossless mode, PSNR of LANIC between 4bpp and 1bpp is always above 38dB and better than the lossy JPEG.