Abstract:A new method which performs Trellis Coded Quantization(TCQ) of wavelet co-efficients based on multi-stage zerotree coding is proposed. First, the zerotree coding utilizes correlation between the subbands, then convolutional coding and signal space expanding are used for increasing Euclidian distance between signals. Finally, Viterbi algorithm is used to find a optimized survived quantized sequence.Simulation states that this method has an advantages of 0.3dD or so over optimized scalar quantization after zerotree coding. The method also has such capability that it has only modest encoding complexity with simple decoding.