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Block transform coded images usually suffer from annoying artifacts at low bit rates, caused by the coarse quantization of transform coefficients. In this paper, we propose a new method to reduce compression artifacts by the overlapped-block transform coefficient estimation from non-local blocks. In the proposed method, the discrete cosine transform coefficients of each block are estimated by adaptively fusing two prediction values based on their reliabilities. One prediction is the quantized values of coefficients decoded from the compressed bitstream, whose reliability is determined by quantization steps. The other prediction is the weighted average of the coefficients in nonlocal blocks, whose reliability depends on the variance of the coefficients in these blocks. The weights are used to distinguish the effectiveness of the coefficients in nonlocal blocks to predict original coefficients and are determined by block similarity in transform domain. To solve the optimization problem, the overlapped blocks are divided into several subsets. Each subset contains nonoverlapped blocks covering the whole image and is optimized independently. Therefore, the overall optimization is reduced to a set of sub-optimization problems, which can be easily solved. Finally, we provide a strategy for parameter selection based on the compression levels. Experimental results show that the proposed method can remarkably reduce compression artifacts and significantly improve both the subjective and objective qualities of block transform coded images.