An encoding technique based on region splitting and vector quantization is proposed for the lower level Laplacian pyramid images. The lower level Laplacian pyramid images have lower variance than higher levels but a great influence on compression ration due to large spatial area. And so from data compression viewpoint, we subdivide them with variance thresholding into two regions such as one called : flat region” and the other “edge region”, and encode the flat region with its mean value and the edge region as vector quantization method. The edge region can be reproduced faithfully and significant improvement on compression ratio can be accomplished with a little degradation of PSNR in spite of the effect of large flat region since the codebook used is generated from the edge region only on from the entire image including the flat region. It can be verified by computer simulation results that proposed method is more efficient in compression ratio and processing time than the conventional encoding technique of vector quantization