A system and method for compressing digital images is provided. The method includes receiving an input image having a dimension d and a target dimension constraint d.sub.t, and determining a number of resolution levels R for generating an image having corresponding dimension d.sub.r. The difference between d.sub.r and d.sub.t is less than the difference between d.sub.r and the corresponding dimension of an image compressed at the next or the previous resolution level. The method additionally includes determining the scale factor S as a function of R and the dimension d of the input image, and scaling the input image in accordance with the scale factor S. The method further includes compressing the scaled input image with the R resolution levels for producing a compressed image including a lowest resolution image. The lowest resolution image has a corresponding dimension that is substantially the same as d.sub.t.