An edge-based wavelet transform is proposed for image compression. In the encoder, first the dominant edges of an image are detected and coded as side information. Then, the wavelet transform (WT) is carried out in such a way that no filtering over previously detected edges is performed. Compression examples show that the edge-based WT achieves good reproduction of sharp edges?even at very low bit rates. Because of the additional side information, the PSNR is typically slightly lower than for standard wavelet coders. But the picture quality scale, an objective quality measure that better reflects the subjective impression, shows superior results for the proposed coder.