Wavelet transform, as a method of multiresolution analysis, which has good characteristics of spacefrequency ,is especially suitable for image coding based on human vision.The algorithm of embedded coding based on wavelet transform can be applied to image compression and progressive transmission effectively. In this paper, the traditional algorithm is improved in two ways to increase the efficiency of image coding and transmission. First, the idea of permutation and combination in mathematics is applied to the traditional method of backtracking in calculating the ROI model. Second, the wavelet coefficients of the background are rejected from the embedded coding stream of wavelet coefficients to achieve higher quality of decoded ROI images. Some experimental results of the improved algorithm are provided at the end of this paper to prove the validity of the improved algorithm.