Abstract: The objective of image compression is to reduce irrelevance image data in order to store the image in less memory space and to improve the transfer time of the image. Without compression, file size is significantly larger, usually several megabytes, but with compression it is possible to reduce file size to 10 percent from the original without noticeable loss in quality. Even though there are so many compressions technique already presents a better technique which is faster and memory efficient. In this paper the Lossless method of Image Compression using Bipolar Coding Technique with LM algorithm in Artificial Neural Network is proposed by the author. The proposed technique is efficient, simple and suitable in implementation and requires less memory space. An algorithm based on the proposed technique has been developed and implemented in MATLAB platform to compress the input image.