In an embedded DCT-based (EDCT) image coding method, decoded images which give better PSNR over earlier JPEG and DCT-based coders are obtained by a scanning order starting, for each bitplane, from the upper left corner of a DCT block (corresponding to the DC coefficient) and transmitting the coefficients in an order of importance. An embedded bit-stream is produced by the encoder. The decoder can cut the bit-stream at any point and therefore reconstruct an image at a lower bitrate. The quality of the reconstructed image at this lower rate is the same as if the image was coder directly at that rate. Near lossless reconstruction of the image is possible, up to the accuracy of the DCT coefficients. The algorithm is very useful in various applications, like WWW, fast browsing of databases, medical imaging, etc.