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We propose disparity-compensated lifting for wavelet compression of light fields. With this approach, we obtain the benefits of wavelet coding, such as scalability in all dimensions, as well as superior compression performance. Additionally, the proposed approach solves the irreversibility limitations of previous light field wavelet coding approaches, using the lifting structure. Our scheme incorporates disparity compensation into the lifting structure for the transform across the views in the light field data set. Another transform is performed to exploit the coherence among neighboring pixels, followed by a modified SPIHT coder and rate-distortion optimized bitstream assembly. A view-sequencing algorithm is developed to organize the views for encoding. For light fields of an object, we propose to use shape adaptation to improve the compression efficiency and visual quality of the images. The necessary shape information is efficiently coded based on prediction from the existing geometry model. Experimental results show that the proposed scheme exhibits superior compression performance over existing light field compression techniques.