In this paper, a new variable block-size image compression scheme is presented. A quadtree segmentation is employed to generate blocks of variable size according to their visual activity. Inactive blocks are coded by the block mean, while active blocks are coded by the proposed matching algorithm using a set of parameters associated with the pattern appearing inside the block. Both the segmentation and the pattern matching are carried out through histogram analysis of block residuals. The use of pattern parameters at the receiver together with the quadtree code reduces the cost of reconstruction significantly and exploits the efficiency of the proposed technique.