Abstract: Image compression is required to reduce the number of bits needed to store or transmit images without any appreciable loss of information or quality. Image compression is of great importance in digital image processing because of its wide applications. In particular, the discrete cosine transform (DCT) is the basis for most image-coding standard. It represents an image as a sum of sinusoids of varying magnitudes and frequencies. DCT is often used in image compression applications since most of the visually significant information about the image is concentrated in just a few coefficients of the DCT. However, at low bit rates, there constructed images at the receiver end generally suffer from visually annoying block artifacts which is the boundaries between adjacent image blocks visible at low bit rates resulting from a coarse quantization. In this paper, a block effect reduction algorithm in DCT domain is proposed to reduce block artifacts as many as possible, while preserving edge information.