Abstract Based on the improved vector quantization (IVQ) algorithm [1] which was proposed in 2012, this paper proposes a further improved vector quantization (FIVQ) algorithm for LASIS (Large Aperture Static Imaging Spectrometer) interference hyper-spectral image compression. To get better image quality, IVQ algorithm takes both the mean values and the VQ indices as the encoding rules. Although IVQ algorithm can improve both the bit rate and the image quality, it still can be further improved in order to get much lower bit rate for the LASIS interference pattern with the special optical characteristics based on the pushing and sweeping in LASIS imaging principle. In the proposed algorithm FIVQ, the neighborhood of the encoding blocks of the interference pattern image, which are using the mean value rules, will be checked whether they have the same mean value as the current processing block. Experiments show the proposed algorithm FIVQ can get lower bit rate compared to that of the IVQ algorithm for the LASIS interference hyper-spectral sequences.