A new fractal-based image compression system, based on a so-called Adaptive Side-Coupling Quadtree (ASCQ) structure, is proposed. The proposed system consists of three processes: a preprocessing, a compression and a decompression process. In the compression process, the original image is represented by an ASCQ structure. The set of Iterated Function System (IFS) codes, which is usually derived in the encoding process, can be calculated directly from this tree structure. Using these IFS codes, an image which is similar to the original one can be reconstructed. Unlike traditional methods, which have separate domain and range pools, the proposed ASCQ structure simultaneously contains the domain pool and range pool. Since the proposed ASCQ is an adaptive structure, the number of IFS codes will be variant depending on their corresponding original images. Experimental results show that the ASCQ structure is indeed an efficient structure for the fractal-based image compression system.