An image encryption and compression algorithm based on chaos system and discrete wavelet transform (DWT) is studied in this paper.Firstly，four original secret images are transformed by DWT，and then the four low-frequency components are used to compose a two-dimensional coefficient matrix.The matrix is scrambled and encrypted by the chaos system，and then encrypted coefficient matrix is decomposed into four two-dimensional coefficient matrixes.Finally，an encrypted compressed image is obtained by the inverse DWT using the four decomposed two-dimensional coefficient matrices.Encryption and compression are realized at the same time in this algorithm which realizes the combination of chaos and wavelet transform，the experimental simulation and analysis show that the algorithm has good encryption and compression performance.