In this paper, a wavelet image compression method using human visually estimated quantizer is proposed. The quantizer has three components. These are constructed by using effects of frequency band, background luminance, and spatial masking. The first quantization factor is a fixed constant value for each band. The second factor is calculated by averaging four wavelet coefficients in the lowest frequency band. The third factor is determined by the difference between wavelet coefficients in the lowest frequency band. Arithmetic coding is used for encoding quantized wavelet coefficients. Coefficients in the lowest band are transmitted without loss. Therefore the compressed image is decompressed by using three quantization factors which can be calculated in the receiver. Compared with previous image compression methods which adopted human visual system, the proposed method shows improved results with less computational cost.