A new shape adaptive predictive lossless image coder is proposed. Three classes of block shapes are delineated with associated “optimum” predctors. Each image is partitioned into sub-blocks that are classified into one of the three classes using vector quantisation. The encoder then employs the predictor corresponding to the class of the block under consideration. Performance evaluation of the proposed coder in comparison with four other lossless coders includmg lossless JPEG indicates its superiority.