This invention has as its object to provide an image processing apparatus and method which can efficiently compress an image while maintaining high image quality, and a storage medium for implementing the method. To accomplish this, an apparatus has a text area detector (101) for extracting a text area from multi-valued image data, and generating text area coordinate data (109) as position data of the text area, a binarization unit (102) for generating binary image data (108) by binarizing multi-valued image data of the text area, a color computation unit (103) for generating text color data (110) by computing a representative color of the text area, a text paint unit (104) for generating non-text multi-valued image data A by converting multi-valued image data of the text area using multi-valued image data of an area other than text, a reduction unit (105) for generating reduced non-text multi-valued image data by lowering the resolution of the non-text multi-valued image data, a JPEG compression unit (106) for compressing the non-text multi-valued image data by JPEG, and an MMR compression unit for compressing the binary image data of the text area by MMR.