Thebettercompressionratecanbeachievedbythetraditionalvectorquantization(VQ)method,andthequalityoftherecoveredimagecanalsobeaccepted.Butthedecompressedimagequalitycannotbepromotedefficiently,sohowtobalancetheimagecompressionrateandimagerecoveringqualityisanimportantissue.Inthispaper,animageistransformedbydiscretewavelettransform(DWT)togenerateitsDWTtransformedimagewhichcanbecompressedbytheVQmethodfurther.Besides,wecomputethevaluesbetweentheDWTtransformedimageanddecompressedDWTtransformedimageasthedifferencematrixwhichistheadjustablebasisofthedecompressedimagequality.Bycontrollingthedeviationofthedifferencematrix,therecanbenearlylosslesscompressionfortheVQmethod.ExperimentalresultsshowthatwhenthenumberofcompressedbitsbyourmethodisequaltothenumberofthosebitscompressedbytheVQmethod,thequalityofourrecoveredimageisbetter.Moreover,theproposedmethodhasmorecompressioncapabilitycomparingwiththeVQscheme.