A new layered image transmission (LIT) design algorithm is presented. The algorithm allows various decoder devices with different resolution and rate requirements to share a common image encoder. The number of layers for the transmission as well as the resolution and the average rate associated with each layer can be determined from the requirements of the decoders. Based on the constraints for each layer, the successive approximation quantization scheme is used to encode images for transmission. In addition to LIT, the algorithm can also be used to design progressive image transmission (PIT) systems where image resolution during transmission can be controlled. Simulation results show that the new algorithm is very effective for constructing both LIT and PIT systems.