An image compression divides an input image into blocks having the predetermined number of horizontal and longitudinal pixels, and scans the divided blocks in a main scan direction and a sub scan direction so as to select them in order as a processing block, and selects as a reference block a block in which positional relation with the selected block and a relation of a pixel value satisfies a predetermined condition. Subsequently, the pixel values of the processing block and the reference block are subjected to an exclusive-OR (XOR) so as to generate a differential image, and in case the differential image satisfies the predetermined condition, the processing block is replaced with the differential image. Further, the image including the differential image obtained by executing the block replacement in the processing block is encoded, and the code data obtained by executing this image encoding, the presence or absence of replacement with the differential image of each processing block obtained by executing the block replacement, and positional information of the reference block are combined and outputted. The image decoding is executed in such way that the image including the differential image from the code data is decoded, and this decoded image is decoded into the original image by an exclusive-OR with the processing block which is divided into blocks and the reference block.