In this paper a new Digital Elevation Map (DEM) image compression algorithm is proposed. DEM image can be threated as a grayscale image, whose pixel values are the elevation values of the map points. The grayscale DEM image is compressed using an adaptive wavelet based image compression algorithm. The method, which is an extension of the progressive mesh compression takes advantage of the multiresolution property of the wavelets while coding the map images. This makes it possible to decode different resolutions of the map from the encoded bit stream providing a multiresolution display of a given map. Experimental results are presented.