In an image coding apparatus for encoding and decoding multi-level image data with block truncation coding, multi-level image data is divided into second blocks (e.g., 6*6 pixels) which is larger in size than a first block (e.g., 4*4 pixels) to be coded. Average value and gradation level amplitude are calculated on a second block, and encoding and decoding are performed on a first block by using the average value and gradation level amplitude. When a pixel not adjacent to the first block is included in an end of the image or the like in a second block, data of the actual pixels are used for the pixels having no data. Thus, deterioration of the image quality can be reduced.