This paper deals with the design and implementation of an image transform coding algorithm based on the integer wavelet transform (IWT). First of all, criteria are proposed for the selection of optimal factorizations of the wavelet filter polyphase matrix to be employed within the lifting scheme. The obtained results lead to the IWT implementations with very satisfactory lossless and lossy compression performance. Then, the effects of finite precision representation of the lifting coefficients on the compression performance are analyzed, showing that, in most cases, a very small number of bits can be employed for the mantissa keeping the performance degradation very limited. Stemming from these results, a VLSI architecture is proposed for the IWT implementation, capable of achieving very high frame rates with moderate gate complexity.