The Gabor transform is very useful for image compression, but its implementation is very complicated and time consuming because the Gabor elementary functions are not mutually orthogonal. An efficient algorithm that combines the successive overrelaxation iteration and the look-up table techniques can be used to carry out the Gabor transform. The performance of the Gabor transform can be improved by using a modified transform, a Gabor discrete cosine transform (DCT). We present an adaptive Gabor DCT image coding algorithm. Experimental results show that a better performance can be achieved with the adaptive Gabor DCT than with the Gabor DCT.