Abstract: Image compression with DCT, quantization encoding method transform coding is widely used in image processing technique, however in these transformations the 2-D images are divided into sub-blocks and each block is transformed separately and into elementary frequency components. There frequency components (DC & AC) are reducing to zero during the process of quantization which is a lossy process. In this paper we are discussing about the image compression techniques with DCT and quantization method for reducing the blocking artifacts in reconstruction. The proposed method applies to several images and its performance is further analyzed for the reduction in image size. The picture quality between the original image and reconstructed image measured with PSNR value with different quantization matrices.