Image compression for low bit rates will loss edge characteristic seriously, which will influence subsequent recognition and comprehension to the image. Hence, how to preserve the edges of the image when compressing the image becomes an urgent problem. In order to solve this problem, an image compression algorithm is proposed. This algorithm first extracted the edges of the image and encoded the edges based on the compression of wavelet Contourlet transform, and then reconstructed the edge preserved image by the edge preservation rule. The experiment results demonstrated that our algorithm could preserve the edges more completely, and keep the value of image contrast index higher. As a result, our algorithm is propitious to enhance the degree of comprehending the reconstructed image content under low bit rates reconstruction condition.