In general, growth algorithms for optimal tree-structured vector quant
izers do not exist. In this paper we show that if the source satisfies
certain conditions; namely, that of diminishing marginal returns; opt
imal growth algorithms do exist. We present such an algorithm and comp
are its performance with that of other tree growth algorithms. Even fo
r sources that do not meet the necessary conditions for the growth alg
orithm to be optimal, such as for speech with unknown statistics, it i
s seen by simulation that the algorithm outperforms other known growth
algorithms. For sources that do not satisfy the required conditions,
the algorithm presented here can also be used to grow the initial tree
for the pruning process. The performance of Such pruned trees is supe
rior to that of trees pruned from full trees of the same rate.