Efficient encoding algorithm is the key factor for image to store and transmit. In order to make it more convient and efficient for image to store and transmit

several kinds of methods have been practised in the past. Among these methods

wavelet transform alogrithm and fractal encoding alogrithm are the two main methods for image processing and have recently received considerable attention. In this paper

with analyzing the merit and disadvantage of basic fractal encoding algorithm

a new fractal encoding method based on wavelet transform has been proposed. Through the two algorithm

a digital image is firstly decomposed into four subband images with two scale wavelet transform

one of them is high frequency part and the others are low ones

then according to the likeness of structure between different level subband image

we apply the basic fractal coding to the decomposed high level subband image and construct the low level fractal codes with the high ones. Satisfactory and effective results have been obtained by analyzing the course of the experiments with the two related alogrithm

especially in shortening the encoding time and improving the compression rate.