Hybrid wavelet and directional filter banks (HWD) is an effective multi-scale geometrical analysis method. Compared to wavelet transform, it can better capture the directional information of images. But the ringing artifact, which is caused by the coefficient quantization in transform domain, is the biggest drawback of image compression algorithms in HWD domain. In this paper, by researching on the relationship between directional decomposition and ringing artifact, an improved decomposition approach of HWD(IHWD) is roposed to reduce the ringing artifact. In addition, the IHWD algorithm and directional weighting model is applied into the JPEG2000 coding framework, and a new still magecompression algorithm IJPEG2000 is proposed. The experimental results show that IJPEG2000 has better performance than JPEG2000 whether on objective evaluation method or on subjective visual feeling.