Abstract: Aim To study the application of wavelet transformation and fractal coding in image compression.Methods\ Due to the self similarity existing among the wavelet coefficients of the subbands with different resolutions and spatial orientations, fractal noncontractive affine mapping transformation was used to predict higher resolution subband wavelet coefficient subtrees with lower resolution ones to fully exploit this self similarity, obtaining high efficient presentation of an image. Results\ Experiment results show that this scheme can obtain high compression ratio while keeping certain reconstruction image quality (e.g. P SNR = 29 08 dB and compression ratio 74 8). Conclusion\ This scheme can take full advantage of wavelet transformation coding and fractal coding and can provide a new insight on low bit rate image compression.