PURPOSE: To improve encoding efficiency and to attain quick picture retrieval by dividing input picture data into plural blocks and executing hierarchical encoding by applying correlation among blocks in the vertical and horizontal directions.

CONSTITUTION: An input picture consisting of 256×256 picture elements are applied from an A/D converter 1, stored in a frame memory 2 and divided into blocks each of which consists of 4×4 picture elements, the blocks are successively read out and transformation coefficients obtained from a DCT circuit 3 are successively rearranged by a zig-zag circuit 4. Then DC coefficients are successively written in the memory 2 and AC coefficients are quantized by a quantizing circuit 5 and then written in a RAM 7. The processing is repeated until a generated image becomes a block of 4×4 picture elements. Since respective blocks are encoded together with their AC coefficients and correlation among blocks in the vertical and horizontal directions is effectively utilized, encoding efficiency can be improved, hierarchical encoding can be attained and quick retrieval can be executed.