Discrete Cosine Transform and Haar wavelet transform are very important transforms in image compression. The objective of this paper is to combine the advantages of these 2 transforms into one transform in order to get better peak-signal-tonoise-ratio (PSNR) and keeping good compression ratio. Our first approach was to apply separately on each 8x8 block the Haar and the DCT transforms. A signaling bit along the transform which gave better PSNR are quantized and transmitted. Our second approach was to construct a new hybrid transform which is a combination of these 2 transforms. We mixed both DCT and Haar transforms into one transform. Results show that our approach outperforms the existing DCT and Haar methods giving a higher PSNR than DCT for the same compression ratio, and permitting better edge recovery than the Haar transform. K E Y W O R D S discrete cosine transform, Haar, hybrid, image compression, wavelet