In a content-based image retrieval (CBIR) system, indexing feature vectors and the similarity measure between feature vectors are two key factors for retrieval performance. We present a new CBIR system with statistical-model based image feature extraction in the wavelet domain and a Kullback divergence based similarity measure. A two component Gaussian mixture model (GMM) in the wavelet domain is employed and the model parameters are used to form features for image indexing. A new Kullback divergence based similarity measure is then presented for image retrieval. The experimental results demonstrate that the similarity measure based on the Kullback divergence is more effective than conventional similarity measures, such as the city-block distance and the Euclidean distance. It is shown that the new CBIR system, with the combination of the GMM and the new Kullback divergence based similarity measure, outperforms most other methods in retrieval performance for texture images, while keeping a comparable level of computational complexity.