The set partitioning in hierarchical trees (SPIHT) algorithm is an efficient wavelet-based progressive image-compression technique, designed to minimize the mean-squared error (MSE) between the original and decoded imagery. However, the MSE-based distortion measure is not in general well correlated with image-recognition quality, especially at low bit rates. Specifically, low-amplitude wavelet coefficients that may be important for classification are given low priority by conventional SPIHT. In this paper, we use the kernel matching pursuits (KMP) method to autonomously estimate the importance of each wavelet subband for distinguishing between different textures, with textural segmentation first performed via a hidden Markov tree. Based on subband importance determined via KMP, we scale the wavelet coefficients prior to SPIHT coding, with the goal of minimizing a Lagrangian distortion based jointly on the MSE and classification error. For comparison we consider Bayes tree-structured vector quantization (B-TSVQ), also designed to obtain a tradeoff between MSE and classification error. The performances of the original SPIHT, the modified SPIHT, and B-TSVQ are compared. © 2006 IEEE.