A DWT unit applies wavelet transform to an input image signal to output transform coefficients, and on those transform coefficients, a quantization unit performs quantization, sorting and bit shifting with a quantization step size determined by target image quality in an image-quality control unit as well as sorting and bit shifting based on information on a region of interest specified by a ROI unit. A coefficient bit modeling unit applies bit modeling on transform coefficients outputted from the quantization unit on a bit-plane-by-bit-plane basis, and an arithmetic coding unit applies arithmetic coding on coded data inputted from the coefficient bit modeling unit. Then, a rate control unit controls the rate of coded data inputted from the arithmetic coding unit.