In the present era of communication system, the requirement of image storage and transmission for image processing are increasing exponentially. This is why; the need for better compression technology is in extremely demands. In this paper, a gray image compression method using modified quantization scheme is proposed. This method having the advantages of BTC and quantization both. The BTC algorithm with quantization has some controlling parameters through which we can control the quality and compression of the image. The performance of the proposed method has been evaluated in terms of Entropy, PSNR, MSE and SSIM. The result of the proposed work is better than the previous work of literature.