Computer simulation results of sub-band coding of digital images using Quadrature Mirror Filtering (QMF) techniqueb are reported. Conditions specifying two-dimensional QMF design constraints are derived. The spectrum of the input signal is then decomposed non-uniformly into sub-band images. In the coding process, the lowest band is DPCM coded using a two-dimensional prediction scheme. The remaining bands are PCM coded by a quantizer which minimizes the perceived distortion of the reconstructed signal. The results are then presented in terms of subjective quality of the reconstructed pictures, SNR, and the resulting bit rate.