An image compression method based on JPEG-LS is presented. In the method, the M×N pixels in the source image are divided into k groups. M, N, and k are all integers larger than one. Each group corresponds to a plurality of pixels among the M×N pixels. The decorrelation procedure and the context modeling procedure are performed for each of the plurality of pixels in the ith group of the k groups. The compensation look-up table is not refreshed until all pixels in the ith group are performed with the decorrelation procedure and the context modeling procedure.