This paper presents a subband coder for compression of color still images. The red, green, and blue (RGB) color components are first transformed to a luminance-chrominance representation, and then each of the three image components are decomposed by an FIR analysis filter bank. The two chrominance components are decimated by a factor of 10:1 or 20:1, depending on the bit rate. The coder is based on dynamic classification of blocks of subband samples into 5 classes according to the block-wise mean square value. Each subband sample is quantized in a uniform threshold quantizer, and the quantizer index coded in an arithmetic coder matched to the statistics of the corresponding class. The dynamic classification scheme gives a significant rate-distortion gain as compared to a scheme without classification using the same filter banks and coding methods.