Image compression helps in storing the transmitted data in proficient way by decreasing its redundancy. This technique helps in transferring more digital or multimedia data over internet as it increases the storage space. It is important to maintain the image quality even if it is compressed to certain extent. Depend upon this the image compression is classified into two categories : lossy and lossless image compression. There are many lossy digital image compression techniques exists. Among this Incremental Self Organizing Map is a familiar one. The good pictures quality can be retrieved if image denoising technique is used for compression and also provides better compression ratio. Image denoising is an important pre-processing step for many image analysis and computer vision system. It refers to the task of recovering a good estimate of the true image from a degraded observation without altering and changing useful structure in the image such as discontinuities and edges. Many approaches have been proposed to remove the noise effectively while preserving the original image details and features as much as possible. This paper proposes a technique for image compression using Incremental Self Organizing Map (ISOM) with Discret Wavelet Transform (DWT) by applying filtering techniques which play a crucial role in enhancing the quality of a reconstructed image. The experimental result shows that the proposed technique obtained better compression ratio value.