A feature-based subband coding scheme is presented. It is intended for the coding of the texture component of a two-component image model. The primary component contains the strong edges, individually described by their amplitudes and positions. A morphological interpolation technique, presented by Casas, Salembier and Torres (see IEEE International Conference on Image Processing, vol.I, p.526-9, 1995), reconstructs the smooth areas of the image from the coded transitions. The residual texture component is coded by subband decomposition. Information about the edge structure, available from the primary component, is used for texture coding by employing adaptive quantizers and bit allocations over arbitrarily shaped regions. This feature-based subband coding technique produces subjective improvements over conventional subband schemes. The enhanced rendition of the strong edges is especially noticeable at very-low bit-rates. The coding of the primary component, based on morphological tools, is also more efficient and of lower complexity than in previously reported schemes for two-component image coding models