Abstract: The embedded zerotree wavelet compression （EZW） uses the zerotree structure of wavelet coefficients and successive approximation quantization （SAQ）. The EZW compression scans iteratively whole wavelet coefficients during the successive approximation quantization process, which decreases the compression efficiency considerably. In this paper, an enhanced image coding algorithm based on embedded zerotree wavelet is presented, in which the multi-threshold is defined, the SAQ process is improved, the embedded coding strategy is modified, and the complex context modeling is adopted. The experiment results show that the new image compression scheme performs better than that of EZW and S + P in the aspects of compression ratio, image quality and coding efficiency.