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In this paper a new fuzzy logic-based lossy predictive coding system for gray-scale still image compression is developed. The proposed coder employs a recently introduced adaptive fuzzy prediction methodology in the predictor design. In addition, it adopts a novel fuzzy gradient-adaptive quantization scheme. The proposed coding technique possesses superior performance over its non-fuzzy linear counterparts especially at low bit quantization. This is due to the inherent adaptivity in the fuzzy prediction methodology as well as the gradient-adaptive quantization scheme. Simulation results are provided to demonstrate the efficient performance of the proposed fuzzy predictive coding system.