Lifting scheme is honored as the key tool to the construction of second generation wavelets. As for the first generation wavelets

lifting scheme is a new way of implementation faster

simpler and easier than the commonly used Mallat algorithm. Lifting scheme is also the one recommended by JPEG2000

a new image coding international standard scheduled to be formally published this year. In order to apply the lifting scheme to wavelet image coding

we make some improvement to the lifting scheme. We first implement the D9/7 bi orthogonal wavelet transform through lifting scheme and then apply the transform to wavelet image coding. In doing so

we improve the procedure of implementation to make sure that each lifting step is FIR filtering. At the same time

we adjust the value of scale factor under the guide of energy conservation. The scale factor obtained this way is different from that recommended by JPEG2000. The experimental results presented in this paper show that our improved lifting scheme has achieved the image coding gain better than that achieved by Mallat algorithm.