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The author proposes an independent and novel approach to image coding, based on a fractal theory of iterated transformations. The main characteristics of this approach are that (i) it relies on the assumption that image redundancy can be efficiently exploited through self-transformability on a block-wise basis, and (ii) it approximates an original image by a fractal image. The author refers to the approach as fractal block coding. The coding-decoding system is based on the construction, for an original image to encode, of a specific image transformation-a fractal code-which, when iterated on any initial image, produces a sequence of images that converges to a fractal approximation of the original. It is shown how to design such a system for the coding of monochrome digital images at rates in the range of 0.5-1.0 b/pixel. The fractal block coder has performance comparable to state-of-the-art vector quantizers.