Abstract: A simple, yet effective still image compression algorithm is described in this paper. According to the characteristic of coefficients in higher subbands and human visual system（HVS）, an attempt is made to improve Shapiro’s EZW algorithm. The improved algorithm has the property that the bits in the bit stream are generated in the order of HVS importance. Information for sorting is calculated by using coefficients of lowest frequency band which are coded losslessly. Therefore, in the proposed method, no extra information to specify the scan order for higher frequency band is needed. So, this algorithm supports fully multirate image decoding.