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Wavelet transform coefficients are defined by both a magnitude and a sign. While efficient algorithms exist for coding the transform coefficient magnitudes, current wavelet image coding algorithms are not as efficient at coding the sign of the transform coefficients. It is generally assumed that there is no compression gain to be obtained from entropy coding of the sign. Only recently have some authors begun to investigate this component of wavelet image coding. In this paper, sign coding is examined in detail in the context of an embedded wavelet image coder. In addition to using intraband wavelet coefficients in a sign coding context model, a projection technique is described that allows nonintraband wavelet coefficients to be incorporated into the context model. At the decoder, accumulated sign prediction statistics are also used to derive improved reconstruction estimates for zero-quantized coefficients. These techniques are shown to yield PSNR improvements averaging 0.3 dB, and are applicable to any genre of embedded wavelet image codec.