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This correspondence presents an image compression approach that integrates our proposed parameter-assistant inpainting (PAI) to exploit visual redundancy in color images. In this scheme, we study different distributions of image regions and represent them with a model class. Based on that, an input image at the encoder side is divided into featured and non-featured regions at block level. The featured blocks fitting the predefined model class are coded by a few parameters, whereas the non-featured blocks are coded traditionally. At the decoder side, the featured regions are restored through PAI relying on both delivered parameters and surrounding information. Experimental results show that our method outperforms JPEG in featured regions by an average bit-rate saving of 76% at similar perceptual quality levels.