In this paper, we present an algorithm and VLSI hardware of a real-time image compression that is based on Vector Quantization (VQ) of Discrete Wavelet Transform (DWT) coefficients. Containing the hardware of both Wavelet and VQ, this architecture is capable of performing real-time image compression for grayscale and 24 bit color image with a resolution of 1024×1024 pixels. The algorithm of 2D DWT is lifting-based nonseparable 2D DWT. Difference-Codebook Binary Tree Search VQ (DC-BTSVQ) is used in the algorithm that lead to a high speed encoder
