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We propose a new scheme of designing a vector quantizer for image compression. First, a set of codevectors is generated using the self-organizing feature map algorithm. Then, the set of blocks associated with each code vector is modeled by a cubic surface for better perceptual fidelity of the reconstructed images. Mean-removed vectors from a set of training images is used for the construction of a generic codebook. Further, Huffman coding of the indices generated by the encoder and the difference-coded mean values of the blocks are used to achieve better compression ratio. We proposed two indices for quantitative assessment of the psychovisual quality (blocking effect) of the reconstructed image. Our experiments on several training and test images demonstrate that the proposed scheme can produce reconstructed images of good quality while achieving compression at low bit rates.