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In this paper, the application of matching pursuit (MP) in progressive coding of memoryless Gaussian sources is studied. In addition, a detailed analysis of the rate-distortion performance of our proposed MP encoder is presented, and the distortion of the MP encoder is derived in terms of dictionary size and number of quantization levels and the optimum parameters are calculated. Our analysis is based on a probabilistic model for matching pursuit residual vectors. Our simulation results verify the accuracy of our analysis and show that matching pursuit can produce an embedded bitstream with comparable quality to existing quantizers. The MP encoder outperforms quantizers that are capable of producing embedded bitstreams.