Discrete cosine transform (DCT)- and wavelet-based schemes have been highly successful for image compression in the lossy mode. Further improvements in one or more stages of these schemes are frequently reported in literature. The input images to these methods are nearly always 8-bit/pixel images. We explore a bit-plane-based decomposition of images to reduce the input data amount for a compression system with the objectives that perceptual quality should remain acceptable and the compressibility of resulting data at the subsequent stage should be unaffected or improved. The proposed method shows favorable results and presents opportunities of further work in this area.