In this paper we present a new wavelet-based coding scheme for the compression of color images at compression ratios up to 100:1. It is originally based on the LZC algorithm of Taubman. The main point of discussion in this paper is the color space used and the combination of a coding scheme with a model of human color vision. We describe tow approaches: one is based on the pattern-color separable opponent space described by Poirson-Wandell; the other is based on the YCbCr-space that is often used for compression. In this article we show the results of some psychovisual experiments we did to refine the model of the opponent space concerning its color contrast sensitivity function. These are necessary to use it for image compression. They consists of color matching experiments performed on a calibrated computer display. We discuss this particular opponent space concerning its fidelity of prediction for human perception and its characteristics in terms of compressibility. Finally we compare the quality of the coded images of our approach to Standard JPEG, DCTune 2.0 and the SPIHT coding scheme. We demonstrate that our coder outperforms these three coders in terms of visual quality.