The present invention is embodied in a system and method for compressing image data using a lapped biorthogonal transform (LBT). The present invention encodes data by generating coefficients using a hierarchical LBT, reorders the coefficients in a data-independent manner into groups of similar data, and encodes the reordered coefficients using adaptive run-length encoding. The hierarchical LBT computes multiresolution representations. The use of the LBT allows the present invention to encode image data in a single pass at any desired compression ratio and to make use of existing discrete cosine transform (DCT) software and hardware modules for fast processing and easy implementation.