The past years have seen a rapid development in the area of image compression techniques, mainly due to the need of fast and efficient techniques for storage and transmission of data among individuals. Compression is the process of representing the data in a compact form rather than in its original or incompact form. In this paper, integer implementation of Arithmetic Coding (AC) and Discreet Cosine Transform (DCT) were applied to colored images. The DCT was applied using the YCbCr color model. The transformed image was then quantized with the standard quantization tables for luminance and chrominance. The quantized coefficients were scanned by zigzag scan and the output was encoded using AC. The results showed a decent compression ratio with high image quality.