Astudy of Image Coding based on Wavelet Transform is made in this paper. On the basis of a systematic analysis of the quantization noises and the reconstruction noises of the sub-images.an optimal bit allocation scheme is presented .which minimizes the system reconstruction distortion at a given bit一rate. When uniform quantizers are used .it is shown that the quantization step of a succeeding level in the wavelet pyramid is a hall of that of its predecessor level. The simulation experiments demonstrate the con- elusion oI this paper and give satisfactory results.