Space missions are increasingly requiring high resolution imagery and, hence, high data compression-two tasks which are inherently incompatible. A tradeoff must, therefore, be made between the available bandwidth and achievable resolution. An efficient visual communication channel-the process from image acquisition to image display-is key to the efficient transmission of the high resolution data. Our algorithm uses wavelet decomposition followed by entropy coding for compression as an integral part of the design of the visual communication channel, where the encoding process constitutes an additional noise source. This allows the development of analysis and synthesis filters which depend not only on the wavelet function, but also on the critical factors which constrain the visual communication channel itself. We feel that this approach is essential in designing a channel which provides the most information, and hence the highest resolution, for the least data.