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We propose a highly scalable image compression scheme based on the set partitioning in hierarchical trees (SPIHT) algorithm. Our algorithm, called highly scalable SPIHT (HS-SPIHT), supports spatial and SNR scalability and provides a bitstream that can be easily adapted (reordered) to given bandwidth and resolution requirements by a simple transcoder (parser). The HS-SPIHT algorithm adds the spatial scalability feature without sacrificing the SNR embeddedness property as found in the original SPIHT bitstream. HS-SPIHT finds applications in progressive Web browsing, flexible image storage and retrieval, and image transmission over heterogeneous networks.