A method for still image compression reduces pixel and texture memory requirements in graphics rendering and other applications. The image compression method divides an image into blocks and stores a quantization index (QIndex) for each block that reflects the level of quantization applied to the block. The QIndex is an index into a table of QFactors. The method performs an invertable transform on a block to generate coefficients for spatial frequency components in the block. It then quantizes coefficients in the block by dividing them by the QFactor in the table corresponding to the QIndex for the block. The QIndex enables the compression ratio of an image to vary across blocks and within each block. A control structure associated with the image stores a pointer to each of the blocks in an image. This control structure allows each block to be accessed and decompressed independently.