an adaptive image coding method and system are disclosed . the system accepts an input image , divides it into image segments , and assigns each segment to a wavelet transform filter from a bank of such filters for transformation . the bank preferably comprises filters adapted for different types of image content , e . g ., sharp edges , slowly - varying contours , etc . filters are preferably assigned so as to produce minimal distortion for their assigned image segments at a given target bit rate , each filter produces transform coefficients for its segment using scale and subband settings common to the entire image . the valid coefficients for each segment are then combined in a composite wavelet coefficient image , which resembles a single wavelet transform of an entire image — although different filters are used to create different portions of the coefficient image . the composite image allows joint , rate - distortion optimized coding for a segmented image . joint coding allocates bits between the transforms of the image segments optimally , and produces an easily scaleable bitstream .