Digital image compression is very important in digital communication and storage. It is an active field in information technology. This paper uses the wavelet transform, through the quantization and entropy coding, to realize the image compression. The compression performance is analyzed in terms of compression threshold and quantization order. When the threshold increases, the impression ratio also increases, but the restored image will have worse quality. On the other hand, when the quantization order increases, the restored image will have better quality, but the compression ratio will decrease.