The current self-organizing feature map (SOFM) neural network algorithm used for image compression, of which a large amount of network training time and the blocking effect in the reconstructed image existed in codebook design vector calculation. Based on the above issue, this paper proposed an improved SOFM. The new SOFM introduced normalized distance between the sum of input vectors and the sum of the codeword vectors as a constraint in the process of searching for the winning neuron, which can remove redundant Euclidean distance calculation in the competitive process. Furthermore, this paper has done image compression by combining wavelet transform with the improved SOFM (WT & improved SOFM). The method firstly conducted wavelet decomposition for the image, retained low-frequency sub-band, then put the high-frequency sub-band into improved SOFM network, and achieved the purpose of compression. Experimental results showed that this algorithm can greatly reduce the network training time and enhance the learning efficiency of neural network, while effectively improve the PSNR (increased 0.6dB) of reconstructed.