A method, system and computer program product for progressively encoding a digitized color image is provided. This involves: initializing a tree structure with at least one starting leaf node; determining at least one representative color for each starting leaf node; and growing the tree structure and updating an encoded image by repeatedly (i) selecting a leaf node n to become a non-leaf node n linked to two new leaf nodes based on an associated achievable cost; (ii) creating the two new leaf nodes by re-allocating each color in n; (iii) determining a representative color for each of the two new leaf nodes; and (iv) encoding the index information associated with the selected leaf node n, the representative colors of the two new leaf nodes, and information regarding a plurality of pixels of the digitized color image corresponding to the two representative colors of the two new leaf nodes.