Abstract: The good spatial-frequencial localization characteristic of wavelet transform make the energy of image congregate mostly in lower frequency subimage. Based on this characteristic, a coding algorithm which combines embedded zerotree wavelet (EZW) coding method with predicting coding method is presented to fit the limited computer resources in small-satellites. Heavyweight higher frequency coefficients are selected and coded by EZW coding algorithm and lower frequency coefficients are coded by predicting coding algorithm. The result indicates that with this coding algorithm the speed of image compression can be increased with good compression effect.