An image compression method for compressing groups of pixel data, including the following steps: MSB portions and LSB portions of the pixel data are compressed separately. Further, the LSB portions are grouped according to their associated MSB portions so that similar pixels are compressed together to gain higher a compression ratio. Some LSB portions are truncated to ensure a compression ratio. When performing compression, enhanced variable-length coding is adopted that predicts more accurate dividers by considering weighted combination of adjacent pixels. The quotient of each groups of compression portion is predicted and coded accordingly.