The present invention provides an image compression method, comprising: determining non-edge portions of an image to be compressed by performing an image edge detection on the image to be compressed; dividing each of non-edge portions into a plurality of connected domains of pixels according to color similarity of the pixels in the non-edge portion, wherein each of the connected domains of pixels is composed of a pixel selected during the division into the connected domains of pixels and the pixels similar in color to and continuously adjacent to the selected pixel; setting the color of each of the connected domains of pixels to be the color of the selected pixel; merging the colors of a plurality of divided connected domains of pixels according to similarity of the colors of the connected domains of pixels; and compressing the image to be compressed by using the merged colors. According to the method, the number of colors used for image compression can be determined according to the characteristics of the image, thus the file size of the compressed image can be effectively reduced with the display effect thereof kept substantially unchanged.