JPEG 2000 is the new standard for image compression. The features of this standard makes it is suitable for imaging and multimedia applications in this era of wireless and Internet communications. Discrete Wavelet Transform and embedded bit plane coding are the two key building blocks of the JPEG 2000 encoder. The JPEG 2000 architecture for image compression makes high quality compression possible in video mode also, i.e. motion JPEG 2000. In this paper, we present a study of the compression impact using variable code block size in different levels of DWT instead of fixed code block size as specified in the original standard. We also discuss the advantages of using variable code block sizes and its VLSI implementation. Keywords: image compression, JPEG 2000, rate-distortion optimization, variable code block size, VLSI, 1
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