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This paper describes a high throughput encoder for high dynamic range (HDR) images that is compatible with the JPEG2000 engine. A nine-level Reinhard-like tone mapping operator is used to calculate a local illumination estimate around each pixel in the image. Both, the local illumination estimate and the tone mapped pixel streams are sent to the JPEG2000 engine for compression. When tested with HDR images and video, the encoder gave high quality output images with high peak signal-to-noise ratios for a compression rate of 4.8 bits per pixel (bpp). The encoder was implemented on a field programmable gate array (FPGA), and has high enough throughput to support a system processing 1024x768 images of 96 bpp at a rate of 60 frames per second.