We proposed an adaptive block truncation coding(BTC) using gradient and a new initial value. We used gradient of sobel operator as a new category classification coefficient to reduce Jagged appearance at edge part. We defined a new initial value to reduce large quantization error in the 4-level quantizer block including edge part. By computer simulations, we showed that the proposed method less computation load, reduced jagged appearance at edge part, also improved PSNR more than the conventional adaptive BTC.