A fractal coder partitions an image into blocks that are coded via self-ref
erences to other parts of the image itself. In this paper we present a frac
tal coder that derives highly image-adaptive partitions and corresponding f
ractal codes in a time-efficient manner using a region-merging approach. Th
e proposed merging strategy leads to improved rate-distortion performance c
ompared to previously reported pure fractal coders, and it is faster than o
ther state-of-the-art fractal coding methods.