Abstract: This paper presents new JPEG2000 based lossy image compression method based on 2D discrete wavelet transform. In the proposed method , 3D image is divided into smaller non-overlapping tiles on which 2D DWT is applied .Thereafter , Hard Thresholding and Huffman coding are respectively applied on each of the tiles to get compressed image. The Performance of proposed compression method is measured over various images and found to be efficient method of image compression in terms of short coding ,less calculations. This compression method is simpler and has better performance compared to that of JPEG compression as we are applying 2D DWT.