A progressive and scalable, region of interest (ROI) image coding scheme based on matching pursuits (MP) is presented. Matching pursuit is a multi-resolutional signal analysis tool and can be employed in order to progressively refine the quality of a set of selected regions of an image up to a specific grade. The computational complexity of this analysis method can be reduced by decreasing the size of MP dictionary. Thus, the proposed method provides a trade off between complexity, rate, and quality. By the suggested scheme, regions of an image with higher receiver's priority are refined in an interactive manner. The transmitter sends an initial coarse version of the image. Then, he receiver transmits its preferred ROI parameters. Afterwards, the reconstructed image is refined according to the ROI parameters, in a progressive way.