Abstract: A spectral imagery compression algorithm based on spectral prediction and wavelet transform is presented. Utilizing spectral prediction and 2D wavelet transform respectively,the special and spectral redundancy is removed. Then,combined with band reordering and quadtree-based subband by subband wavelet image coding method,the experimental results of the proposed scheme show obvious advantages. At the same compression ratio,the average PSNR of reconstructed images is 3. 69 dB higher than that of JPEG2000. Meanwhile,with the anti-error and multi-resolution decoding features,it is suitable for the application in remote sensing platforms.