Because the ideal condition which quantization error has a white power spectrum is never valid on the state of multilevel quantization, the intrinsic low frequency characteristic of image is inflected by the processing of error diffusion only dealed with highpass filter (error blue shift). In this paper, it is proposed that the ideal error filter of error diffusion alogrithm should have greater gains on the high frequency, and finite attenuation on the low frequency. Accoding to such idea, the impulse response of error filter is designed anew, and the stability of filter is taken into account. With the filter the optimized algorithm of multilevel error diffusion used for color image quantization is formed.