ABSTRACT Magnetic Resonance (MR) image is a medical image technique required enormous data to be stored and transmitted for high quality diagnostic application. Various algorithms have been proposed to improve the performance of the compression scheme. In this paper we extended the commonly used algorithms to image compression and compared its performance. For an image compression technique, we have linked different wavelet techniques using traditional mother wavelets and lifting based Cohen-Daubechies-Feauveau wavelets with the low-pass filters of the length 9 and 7 (CDF 9/7) wavelet transform with Set Partition in Hierarchical Trees (SPIHT) algorithm. A novel image quality index with highlighting shape of histogram of the image targeted is introduced to assess image compression quality. The index will be used in place of existing traditional Universal Image Quality Index (UIQI) “in one go”. It offers extra information about the distortion between an original image and a compressed image in comparisons with UIQI. The proposed index is designed based on modelling image compression as combinations of four major factors: loss of correlation, luminance distortion, contrast distortion and shape distortion. This index is easy to calculate and applicable in various image processing applications. One of our contributions is to demonstrate the choice of mother wavelet is very important for achieving superior wavelet compression performances based on proposed image quality indexes. Experimental results show that the proposed image quality index plays a significantly role in the quality evaluation of image compression on the open sources “BrainWeb: Simulated Brain Database (SBD) ”. KEYWORDS CDF 9/7,MRI, Q(Kurtosis),Q(Skewness), SPIHT, UIQI