This paper presents a new image coding scheme which integrates the wavelet image coding and the fractal image coding together. There are two similarities emerging after an image has been decomposed with wavelet transform

one is the self similarity of each subimage and the other is the co similarity between the subimages with the same orientation at different resolution. It is the co similarity that we make use of in our scheme. The experimental results provided in this paper justifies the good performance as well as efficiency of our scheme.