We have utilized for image coding a transform tree coding technique that is theoretically optimal for Gaussian sources and the squared error criterion at all nonzero rates. In the interest of affordable computation, we used a suboptimal discrete cosine transform to encode image sub-blocks and a selective search through the code tree. Coding simulations of a woman's face image at rates of 1.0 and 0.25 bits/pel gave good to excellent results. The rate 1.0 results were superior to previous ones using another tree coding method. Until now there have been no reported results with searched codes for images using a rate under 1.0 bit/pel. Encoding a computer-generated image source indicated SNR performance about 2dB less than the optimal SNR of the rate-distortion bound.