The key to target-based SAR image compression is to corporate ATD algorithm with image coding. A SAR image encoder embedded with a multiresolution CFAR （constant false alarm ratio） detection algorithm in wavelet domain used db4 is proposed in this paper. Target areas are detected before quantization. Significant wavelet coefficients mask is derived based on db4. The sequences of target areas are encoded with a higher bit rate than those of background. Compression and decompression are done on MSTAR target chips； the quality parameters for target areas are achieved； comparison is made with a conventional SAR image coding algorithm of W/TCQ. Experiments show that SNR of target areas using TIC algorithm with low bit rate are higher than that of using W/TCQ algorithm and context information is preserved.