Abstract: A chaotic image encryption algorithm,combined with DCT transform compression technology,is presented here.The soul of the new algorithm is to compress the original image before encryption.The encryption matrixes generated by the hybrid chaotic system are used to deal with the compressed image,with the methods of position scrambling and grayscale value alternative encryption.Theoretical analysis and experimental results show that the algorithm can not only effectively reduce the image of storage capacity,improve the speed of data transmission,but also has good encryption performance.