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In this paper, we investigate the problem of how to quantize the wavelet coefficients in the lowest frequency subband with non-uniform scalar method. A novel wavelet image coding algorithm based on non-uniform scalar quantization is proposed. This algorithm adopts longer step to quantize the wavelet coefficients in the lowest frequency subband and uses shorter step for other ones. According as the results of the experiment we design a coding approach by using two labels 0 or 1 to code a coefficient bit of decimal plane. Experiment results have shown the proposed scheme improves the performance of wavelet image coders. In particular, it will get better coding gain in the low bit rate image coding.