When the data is in uncompressed state it becomes difficult to store and transmit it. This problem can be addressed by image compression. Image compression reduces the number of bits per pixel of the image so that its storage and transmission becomes easy. Basic goal of image compression is to increase visual quality of image with less noise. The proposed methodology satisfies this aim. Hybrid of DCT (Discrete Cosine Transformation) and DWT (Discrete Wavelet Transformation) are combined to achieve this goal. Combined advantages of DCT and DWT are used as proposed methodology. DCT has high energy compaction and less number of computational resources are required while DWT has multi resolution transformation. Hybrid DCT-DWT is proposed to compress and reconstruct images. Also colorization of the reconstructed images is proposed. Reconstructed images are stored in gray format and to visualize it colorization is done on that gray scale image. Results show that this method of compression and colorization helps in compressing and retaining color of images
