An image coding scheme based on multiwavelet transform and vector quantization is proposed. Firstly, image is decomposed by multiwavelet transform, and then the high frequency coefficients are coded by use of the codebook made by the improved LBG algorithm. The scheme fully uses the comparability of different resolution sub-images in the multiwavelet domain. Coefficients in the highest resolution sub-image are indexed with codebook, and coefficients in the lower resolution sub-image use these index information directly under some certain organization. Comparing to the traditional coding method based on single wavelet, the scheme can improve the quality of reconstruction image and reduce the bite rate at the same time.