A differential index (DI) assignment scheme is proposed for the image encod
ing system in which a variable-length tree-structured vector quantizer (VLT
SVQ) is adopted. Each source vector is quantized into a terminal node of VL
TSVQ and each terminal node is represented as a unique binary vector. The p
roposed index assignment scheme utilizes the correlation between interblock
s of the image to increase the compression ratio with the image quality mai
ntained; Simulation results show that the proposed scheme achieves a much h
igher compression ratio than the conventional one does and that the amount
of the bit rate reduction of the proposed scheme becomes large as the corre
lation: of the image becomes large. The proposed encoding scheme can be eff
ectively used to encode MR images whose pixel values are, in:general, highl
y correlated with those of the neighbor pixels.